Franklin Templeton India Remains Committed To Investors: Report

Relieving investors' concerns on the firm's decision to close six of its debt fund schemes, Franklin Templeton India President Sanjay Sapre told CNBC-TV18 in an interview that "winding up doesn't mean write-off for investors."

Sapre further told CNBC-TV18 that the fear of winding up other funds in the country was not accurate and assured that they remain committed to the investors.

Last week, Franklin Templeton India in a statement said that it was closing down six of its funds due to liquidity issues arising from the COVID-19 crisis. The scheme included Franklin India Low Duration Fund, Ultra Short Bond Fund, Short Term Income Plan, Credit Risk Fund, Dynamic Accrual Fund and Income Opportunities Fund.

The announcement gave rise to concerns that investors would rush to make redemptions of schemes from other leading players in mutual funds companies as well.

On Monday, the Reserve Bank of India (RBI) came to the rescue and announced a special liquidity facility for mutual funds worth Rs 50,000 crore to help them deal with the liquidity strains caused by heightened volatility in capital markets due to COVID-19.

The central bank said that is decision comes in the wake of "redemption pressures related to the closure of some debt MFs and potential contagious effects therefrom" but added that the stress is, however, "confined to the high-risk debt MF segment at this stage; the larger industry remains liquid."