RBI Announced Rs. 50,000 crore Special Liquidity Facility for Mutual Funds

Reserve Bank of India on Monday announced a special window of ₹50,000 crores has been allocated in view of the redemption pressure that the fund houses are facing.

The coronavirus has not just impacted the human lives physically but also through economic means. Recently, after Franklin Templeton closed 6 debt mutual funds leaving all investors in a panic, Reserve Bank of India has decided to help the Indian Mutual Funds with a special liquidity facility of Rs. 50, 000 crores. 

This funding will not only help in easing up the liquidity pressure of the sector but also in boosting up the confidence of the investors. If analysts are to be believed, this move taken by RBI is surely going to provide a good amount of help to the mutual funds to combat the negative impacts faced by the pandemic. 

About Course:

"Did you Know? In this pack you will get All new content we launch in the next 3 months"

This is the most recommended and NRA-CET ready Pack!

Use Code 'DREAM' to avail at best price today

This package Includes IBPS PO Study Material -  Subscribe Now

About Bank Mahapack
If you are preparing for more than 1 Banking & Insurance exams then this is the pack we recommend you buy.

It is most cost effective and you get access to 100% digital content for Bank & Insurance exams on Adda247.

Banking & Insurance Exams Covered in this Pack

Additionally, you can crack any private bank job exam with content in this pack.


Bank & Insurance Mahapack Highlights 

  • Structured course content
  • Recorded classes available if you miss any live class
  • Previous Years’ Papers of all upcoming exams.
  • Full Length Mocks based on the latest pattern with detailed solutions (video solutions for certain topics)
  • Topic level knowledge tests
  • Strategy sessions, time management & Preparation tips from the experts


Validity: 3 Months

Note: This package is not a part of Double Validity Offer

Bank Maha Pack
  1. Unlimited Live Classes & Recorded Video Courses
  2. Unlimited Tests and eBooks
  3. 1 Lakh+ Selections
  1. 24 Months
  2. 1 Month
  3. 3 Months
6199 516/month
List of Important Days in May 2020 World Bank Releases Commodity Markets Outlook April 2020 States and Capitals of India: List of 28 States and 8 UTs Bank Holidays 2020: Complete List of Bank Holiday 2020 in India

10 important things to know about the decision

Here are the 10 important points that can help in understanding the announcement made by the RBI in brief. 

  • The RBI will be conducting a repo operation for a time period of 90 days at a fixed rate. As per the decision, the banks will be accessing the funds from the repo window of RBI. Though currently the scheme will be active till 11th May, the timeline can be soon reviewed by the Central Bank depending upon the condition of the market. 

Also Check,

  • As a result of the announcement, gains were noticed in the financial stocks such as Nifty Bank Index. 

  • RBI has mentioned that the financial stress is mainly over the mutual funds with the high-risk debt type and the other larger industries will be liquid. 

  • The announcement mainly was made with respect to the incident that happened with Franklin Templeton. The company has wrapped up 6 of the Indian funds due to the situation created by the coronavirus impact. 

  • No doubt such an incident of Franklin Templeton created chaos and many of the investors started withdrawing their investments from different mutual funds. This was a devastating situation for many of the fund houses and these fund houses started taking steps so that they can reassure their investors about the investments that they have made. 

  • Many of the company heads such as Motilal Oswal have assured that there is still enough liquidity in the market so that the investors do not have to worry. On top of this, the announcement of special liquidity funds by RBI has helped in boosting up the confidence of the investors especially after the incident of Franklin Templeton.

  • Franklin Templeton is the 9th biggest mutual in India and has an asset worth of higher than Rs. 86,000 crores. The US-based company is there in India for the last two decades and mainly deals in low-rated paper options such as “A” in return for which it offers higher profit to the investors. 

  • P Chidambaram, the former Finance Minister of India has tweeted welcoming the announcement made by the RBI lately. 

  • RBI has mentioned that it is keeping a close eye on the economic condition of the market that is experiencing ripples by the impacts of COVID-19. Also, it has mentioned that it is going to take all possible steps that will help in preserving the economic stability of the country. The Indian Government has extended the lockdown for fighting the situation and this condition getting an announcement like this is a great relief for the economic condition of the country. 
Is RBI Grade B Officer Gazetted? English Speech: Commonly Mispronounced words Basic English Grammar Rules of Nouns What is IBPS PO Salary?

  • By now, there are more than 29,000 positive cases of coronavirus in India of which more than 900 people are dead.  To control the situation of spreading out of the virus, even more strict measures are being taken that are surely hampering the country’s economy. In light of this, apart from the announcement made by RBI, the central bank has taken many other measures such as cutting down on the key interest rates and others for offering comfort to the citizens. 

The pandemic has created a mess across the world and different Governments are taking steps to not just combating the situation but also in helping out their economic conditions. India has been praised by many other countries across the world for its quick decisions and clever acts. Extending the lockdown period is one of the major decisions that had helped in controlling the spread of the virus while there is  no doubt that this had impacted the economy of the country. Now to combat the economic crash, the announcement by RBI is another big decision worth praising. 

Click Here to Register for Bank Exams 2020 Preparation Material

What is a Debenture? Credit Rating Agencies in India IMF releases “World Economic Outlook”