UTI chief meets Sinha

By Our Special Correspondent

NEW DELHI, JULY 19. The newly-appointed Chairman of the Unit Trust of India (UTI), Mr. M. Damodaran, today apprised the Union Finance Minister, Mr. Yashwant Sinha, about the latest situation in the UTI. This was Mr. Damodaran's first meeting with the Finance Minister since his appointment as Chairman on Sunday last.

The crisis-ridden UTI has already announced a special package for small unit holders of US-64 holding up to 3,000 units on Sunday itself, following which negotiations had begun with banks and financial institutions for a special line of credit to finance the redemption of US-64 that has been promised from August 1. The UTI has also tried to guard against a possible run on the US-64 by offering a 10 paise higher redemption price every month.

Emerging from the nearly hour-long meeting, Mr. Damodaran told presspersons that the UTI was not anticipating any pressure on account of the redemptions for small unit holders of the US-64 scheme. The scheme had been paying high dividends and the repurchase price would also be higher every month, he added.

He also said that financing from banks had already been tied-up and the issue of appropriate collateral was being discussed. The UTI would see the response to the special package during the first two weeks of August and then decide on the likely quantum of credit required to meet the redemptions.

Mr. Damodaran also said that the UTI would undertake extensive restructuring over the next one year and would also reduce its exposure to the equity market and move back to debt instruments.

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Section  : National
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