Mutual fund distributors body wants RBI to buy troubled portfolios from fund houses, pay investors

In the wake of Franklin Templeton wounding up six of its debt mutual fund schemes, India’s largest mutual fund distributors body has urged the Reserve Bank of India to set up a Special Purpose Vehicle (SPV) to buy portfolios from troubled fund houses and pay off investors. The Foundation of Independent Financial Advisors (FIFA) in a note addressed to the Finance Ministry, SEBI, RBI and AMFI stressed on the liquidity crunch faced by the fund houses that are facing panic redemption after the Franklin Templeton fiasco that left 3.25 lakh investors in the dark.

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