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Former Finance Minister P Chidambaram said that Franklin Templeton Mutual Fund’s decision to wind up six debt schemes is a matter of grave concern to investors, the mutual fund industry and the financial markets.
In a statement issued in New Delhi on Saturday, he said a similar situation arose in the first week of October 2008 (during the global financial crisis) when mutual funds faced liquidity stress.
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Franklin Templeton AMC’s decision to wind up debt funds can trigger a crisis of confidence
“Government immediately consulted RBI, SEBI, IBA, AMFI and others. An urgent meeting of the FSDC was convened and a solution was found by the end of the day. On the next morning, officers of RBI and SEBI met at 8 AM, and RBI announced a 14-day special repo facility and allowed an additional 0.5 per cent of NDTL. The situation was resolved," he said.
“Fortunately, the markets will be closed today and tomorrow. I expect that the government will act promptly and resolve the situation quickly,” he demanded.
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