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A week ago, the Reserve Bank of India (RBI) announced a special liquidity measure of Rs 50,000 crore for the mutual fund industry, and the Association of Mutual Funds India (AMFI) on May 3 claimed that net redemptions under Credit Risk Funds have dropped 81.5 percent.

After a sharp redemption pressure by the investors in last week, it has dropped from its peak of Rs. 4,294 crores on 24 Apr 2020 to Rs. 793.99 crore on 27 Apr 2020.

Credit risk funds constitute less than 5% of the total Debt fund AUM.

There has been a panic in the market last month due to COVID-19 and the fiasco of Franklin Mutual Fund which led the redemption pressure on low-quality papers debt mutual fund, then RBI came out with a special liquidity package of 50,000 crores for the mutual fund on 27th Apr, and the data indicates the investor’s comfort on RBI Decision.

AMFI Chairman Nilesh Shah has also said that they are continuously working with regulators for the normal functioning of the market.

Team Nivesh