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RBI opens funding lines for MFs

April 28, 2020

RBI opens funding lines for MFs

The RBI is providing a facility of ₹50,000 crore for mutual funds to borrow from banks. RBI’s new facility will allow banks to borrow from the central banks for 90 days.

After the 90 days, the fund houses have to return the money to the bank and take back the collateral deposit. Franklin Templeton MF facility has believed to have expedited the central bank’s decision to open such facilities.  RBI has announced the first package to help the economy during the outbreak of coronavirus in the country.

RBI release noted, “This will be available to liquidity adjustment facility eligible banks against eligible collateral can be availed only for on-lending to mutual funds”.

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