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US-64 package may be firmed up today

Our Bureau

NEW DELHI, July 11

THE UTI management is expected to firm up details of a package for the beleaguered investors of US-64 at a meeting with Finance Ministry officials to be held on Thursday.

Among the options which the UTI and the Government are considering are utilising a line of credit from the State Bank of India aggregating Rs 1,500 crore against the collateral of securities. Another option is to obtain an interim credit facility from th e Reserve Bank of India.

A consultative group formed by the UTI had met in Mumbai on Wednesday to submit recommendations for revamping the US-64 scheme.

The UTI Act, 1963 provides for borrowing by the Trust from the RBI either against stocks, funds and securities or against the security of the bonds which the Trust may issue with the approval of the Central Government. If such bonds are to be issued, the Central Government would have to guarantee the repayment of the principal and interest.

Besides, the UTI Act also provides for a special contribution by the RBI, solely for meeting the losses arising out of, or any additional amount required in connection with, any variation made by the Trust in the sale or re-purchase of a unit.