Alliance Capital Mutual Fund suffered another setback on Monday with a number of fund distributors advising their clients to exit the fund.

A leading Mumbai-based distributor told Business Standard on condition of anonymity: "Several investors have approached us to exit the fund's equity schemes. These include big institutional investors." However, investors continued to remain comfortable with Alliance's fixed-income scheme, he added.

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Piyush Surana, chief operating officer, Alliance Capital Management, told Business Standard: "We are not aware of any distributors asking our clients to redeem their money. In fact, the top management is in the process of talking to all our distributors and explaining the situation to them." Surana also denied any major redemption pressure.

"We had redemptions of about Rs 25 crore (Rs 250 million) in fixed income non-cash funds today and about Rs 10 crore (Rs 100 million) in equity funds," he said.

The distributors put the total amount of redemptions at between Rs 200-250 crore (Rs 2-2.5 billion). This blow comes after the Securities and Exchange Board of India debarred its fund manager Samir Arora from the securities market with immediate effect.

Arora had recently resigned from Alliance Capital to float a new asset management company with Rana Talwar's SabreCapital.

In another development, the Association of Mutual Funds of India, called for an extra-ordinary meeting of all mutual fund players to review the situation after Sebi's order.