Reserve Bank of India

A Rs 50,000 crore special liquidity facility for the mutual fund was announced by the Reserve Bank of India (RBI) on Monday.

The announcement comes a day after the Franklin Templeton Mutual Fund decided to close six debt schemes.

The BI, in a statement, said that heightened volatility in capital markets due to COVID-19 pandemic has imposed liquidity strains on mutual funds (MFs).

“This has intensified in the wake of redemption pressures related to the closure of some debt MFs and potential contagious effects from here,” the statement added.

“With the aim to ease liquidity pressures on MFs, it has been decided to open a special liquidity facility for mutual funds of Rs 50,000 crore,” the RBI statement added.

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