The Unit Trust of India is likely to restructure its long-term assured return schemes once the formal bifurcation of the trust is completed.
R Rangarajan, chief investment officer (debts), said: "Once the administrator for UTI-1 is appointed, we will take a view with the government to re-set the returns in long-term schemes, especially those which are due for redemption only after 10-20 years."
There are over 20 assured-return schemes which will come under UTI-I, while all NAV-driven schemes will be managed by UTI-II.
In October 2002, UTI had informed the government that it had moved the Securities and Exchange Board of India to obtain the views and the approval of the market regulator on the foreclosure of some long-term assured schemes.
The objective of re-setting the assured rates and foreclosure of some schemes is to reduce the government's liability arising out of the shortfall in these schemes.
Rangarajan also said the formal bifurcation would be completed in the next few weeks and certain formalities are being worked out.
"Life Insurance Corporation of India, State Bank of India, Punjab National Bank and Bank of Baroda are yet to sign an agreement with the government," he said.
Further, the government has appointed two independent agencies for assessing the net asset value of UTI-II, which would be transferred to a company jointly promoted by these four institutions.
Commenting on UTI's recent inflows in its open-ended debt schemes, Rangarajan said the assets under management has jumped up by Rs 1,000 crore (Rs 10 billion) to close to Rs 10,000 crore (Rs 100 billion) in the last four months.
"Most of the inflows have been from retail investors, triggered by fall in interest rates in bank deposits," he added.
In the last five months, the number of investors in UTI's Bond Fund has increased to 250,000, while the corpus has jumped up by 50 per cent to Rs 2,100 crore (Rs 21 billion).
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