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UTI chief says no anxiety on Trust solvency

India's largest mutual fund manager, the Unit Trust of India, said on Wednesday there was no anxiety over the solvency of the Trust and its flagship fund Unit Scheme-64.

"There isn't going to be any anxiety on the solvency front for the entire Trust and US-64 scheme," Meleveetil Damodaran, the newly appointed UTI chief, said.

Damodaran was reacting to an interview carried in Wednesday's edition of the Business Standard newspaper quoting him as saying UTI faced problems on two fronts - liquidity and solvency.

On July 2, UTI, which manages two-thirds of the overall assets of the Indian mutual fund industry, suspended redemptions for the rest of the year of units in its largest fund, US-64.

That action followed heavy redemptions in the April-June quarter, sparked by falling Indian stock prices and fears of a dividend cut and a sharp drop in the repurchase price if linked to the fund's net asset value.

Bombay-based UTI subsequently announced a plan to allow limited redemptions beginning next month.

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