New Delhi (NVI): The Reserve Bank of India (RBI) today announced Rs 50,000 crore liquidity facility support for mutual funds, to ease liquidity pressures on the funds amid Covid-19.
The facility will be effective from today till May 11, 2020 or up to utilization of the allocated amount, whichever is earlier, the RBI said in a statement today.
Under this facility, the RBI will provide funds to banks at lower rates and banks can avail funds for exclusively meeting the liquidity requirements of mutual funds.
The RBI will conduct repo operations of 90 days tenor at the fixer repo rate, under the liquidity facility effective from today.
This liquidity facility is on-tap and open-ended, and banks can submit their bids to avail funding on any day from Monday to Friday (excluding holidays).
Indian stock markets surged immediately after the RBI announced the facility for mutual funds, according to media reports.
The RBI said that stress is confined to high-risk debt mutual fund segment at this stage. “The larger industry remains liquid,” it further added.
