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Wednesday, Mar 06, 2002

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Govt allocates Rs 300 cr to UTI

Our Bureau

NEW DELHI, March 5

THE Government has provided Rs 300 crore to Unit Trust of India to help meet the shortfall between the assured repurchase prices and the net asset value.

The support to UTI will ensure that any redemption made at prices higher than the NAV of US-64 between August 2001 and May 2003 will not affect unit holders who remain in the scheme.

Last December, the Government justified this support in view of the special nature of the US-64 scheme and the systemic risks posed to the capital markets if such support were not provided.

The allocation has been made in the 2002-03 Budget. A provision of Rs 370.92 crore has also been made on account of interest payments against the special securities issued to UTI. These securities were issued to UTI for the Special Unit Scheme '99 to it bail out in the wake of US-64's reserves turning negative.

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