The Reserve Bank of India (RBI) has extended regulatory benefits to all banks under the Special Liquidity Facility for Mutual Funds (SLF-MF) scheme.
The extension includes those banks also which are using their own resources to extend liquidity support to the mutual funds.
Important value additions:
Special Liquidity Facility for Mutual Funds (SLF-MF) scheme
Recently, the RBI had announced Rs 50,000-crore SLF-MF scheme to bailout the mutual funds facing redemption pressure.
The scheme was announced in the backdrop of Franklin Templeton Mutual Fund deciding to shut several schemes.
Banks meeting the liquidity requirements of MFs will be eligible to claim all the regulatory benefits available under the scheme.
Mutual Fund
A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets.
Redemption
In finance, redemption describes the repayment of any money marketfixed-income security at or before the asset’s maturity date.
Investors can make redemptions by selling part or all of their investments such as shares, bonds, or mutual funds.
