Banks get time till July-end to treat MF loans as market exposure

The central bank had earlier asked the banks to be judicious in extending finance to MFs and grant loans and advances to them only to meet their temporary liquidity needs for the purpose of repurchase or redemption

The Reserve Bank of India (RBI) has given one more month to banks to meet the new mutual fund (MF) funding norms which aim at tightening the lenders' exposure to mutual funds, reports PTI.

As per the new norms, the banks' exposure to MFs would be treated as part of their capital markets exposure. Further, the new norms cap banks' overall exposure to equity-linked MFs and other direct advances to acquire securities and investment in venture capital funds, at 20% of their total networth as on the end of the previous fiscal.

"On a review, it has been decided to further extend the transition period by one more month up to 31 July, 2010," the RBI said in a notification on Wednesday. Earlier, the banks had been asked to comply with the guidelines by 30th June.

The central bank had earlier asked the banks to be judicious in extending finance to MFs and grant loans and advances to them only to meet their temporary liquidity needs for the purpose of repurchase or redemption.

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Nimesh Tajne

3 months ago

Right now person has been issue the cheque on date over wriite , but bank provide returm memo.

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