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UTI, bank chiefs discuss US-64 assistance package

The Unit Trust of India chairman M Damodaran and chief executives of seven public sector banks led by State Bank of India chairman Janki Ballabh on Wednesday met to formulate a financial assistance package for US-64 scheme, even as the country's largest mutual fund maintained that the investors were unlikely to rush for repurchases.

The banks, adopting a consortium approach with SBI as a largest member, are ready to extend a line of credit and "now, UTI will have to come up with its requirements", Punjab National Bank chairman and managing director S S Kohli told reporters after the detailed meeting in Bombay.

Later, UTI executive director B G Daga claimed that "there may not be any need for UTI to draw on the credit line to ensure liquidity as the package for small investors has been received favourably".

The meeting was a follow-up of assurance by state-owned banks and financial institutions for support in Delhi last week, he said.

"After UTI announced an exit route on July 15 for its flagship scheme, we do not expect an undue pressure for redemptions," Daga said.

The trust has already opened a credit line of Rs 15 billion with SBI to ensure liquidity for payment of dividends and redemption for the schemes which would be maturing shortly.

SBI chief Ballabh is also on the UTI board.

Besides SBI and PNB chiefs, others attending the meeting included CMDs of Bank of India, Bank of Baroda and Central Bank of India.

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