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.
“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.