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UTI clears Rs 30 billion June-end liability

BS Market Bureau

The Unit Trust of India on Thursday cleared its liability on three schemes maturing on June 30 drawing down the curtain on the controversy surrounding its ability to meet the redemption of the assured return schemes.

It sent cheques to investors in the three schemes - MIP-95, MIP-97 (II) and Institutional Investors Special Fund Unit Scheme 97. The total outgo is over Rs 30 billion.

"UTI can withstand any redemption pressure. The investors should not have any apprehension about this. All commitments will be met," said a senior UTI official.

The fund is borrowing Rs 10 billion from the State Bank of India at a rate much below the bank's prime rate on the back of a government guarantee of Rs 10 billion. On April 30, UTI redeemed MIP-97, drawing down Rs 6.17 billion from its development reserve fund.

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