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Money > Business Headlines > Report April 30, 2002 | 1110 IST |
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UTI board starts deliberations over shortfall scenarioBS Markets Bureau The board of Unit Trust of India has started appraising the scenario after its sponsors reportedly put up their hands in meeting the shortfall arising at the time of maturity in its assured return schemes during the next few months. Things have turned worse for UTI with the Securities and Exchange Board of India insisting that UTI meet any shortfall in these assured returns from its own development reserve fund. Around five of its monthly income plans are maturing in the current year, while the rest of them will mature in the next 2-3 years. MIP'97, is scheduled to mature on Tuesday, and MIP'97 (II) is maturing in June. Senior UTI officials point out that the fund does not envisage any problem in meeting the shortfall in MIP'97. He also added: "We have received an encouraging response to the switchover option to UTI Bond Fund, an open end fund." Meanwhile, UTI officials denied any fresh lines of credit were being drawn down by the UTI to meet the shortfall. It may be recalled that Sebi has already permitted UTI to launch a new open-end regular income scheme for those investors who wish to switch after the maturity of the MIPs. UTI is believed to have taken a big blow after the Industrial Development Bank of India, Life Insurance Corporation, and the State Bank of India have taken the view that they are just holders of UTI's capital on behalf of the government and as such they are not technically sponsors of the Trust. Hence, they cannot be held monetarily liable for any shortfalls. It may be recalled that the matter of the sponsorship of UTI has been referred to Sebi, since the MIPs are all schemes registered with the market regulator. ALSO READ:
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