Security of investment

Sir, - This refers to the aftermath of the collapse of the US-64 scheme of the Unit Trust of India. Several statements are being made by the Finance Minister, party leaders and financial analysts regarding revamping of the scheme and taking care of the small/retail investors.

Several points arise here that need to be considered in depth. There are many retirees/senior citizens who had invested their entire superannuation benefits in the scheme.

This category of investors are not interested in any speculative transactions or business. Their only concern would be a reasonable return on their investment and the security of their invested amount. All these unit holders had purchased the units @ Rs.13.5-14.0/Unit,(ie) much higher than the actual NAV. It is this category of investors that the UTI should address and not debate on the basis of small or retail investors.

It appears that the actual NAV might fall to around Rs.9.0-10.0. This category of investors (most of them) would accept a guaranteed return reasonable enough compared to the nationalised bank interest rates with the security of the capital assured. Most of them would be prepared to accept also a lock-in period. Scapegoats would be searched for in the coming days. But the middle class unit holder is only interested in the security of his/her invested amount and a healthy balance sheet of the scheme.

M. Nagarajan,

Chennai

Sir, - The Investors Grievances Forum (IGF) seems to be on a `restructuring' spree.

In the Madhavpura Bank case it was Mr. Kirit Somaiya, BJP MP and president of IGF who spearheaded

the political move to `revive' the scam-tainted bank by pumping in more than Rs. 1200 crores by way of deposits from other co- operative banks in Ahmedabad and the RBI doling out approximately Rs. 487 crores by way of guarantee amount under DICGC.

But has anyone looked into the repercussions it would have on cooperative banking sector in the country? In the case of the UTI, restructuring by giving Central Government and State Government guarantee for the infusion of fresh funds will not do.

The remedy lies in removing the shortcomings in UTI's working and bringing it on a par with other mutual funds in the country under the umbrella of SEBI.

Satish Murdeshwar,

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