New Delhi, April 25 : Former Finance Minister and senior Congress leader P. Chidambaram on Saturday said that Franklin Templeton Mutual Fund's decision to wind up six debt schemes was a matter of "grave concern" to the investors, mutual fund industry and the financial markets and urged the government to "resolve" the situation quickly.
"Fortunately, the markets will be closed today and tomorrow.
I expect that the government will act promptly and resolve the situation quickly," Chidambaram said In a statement.
"I recall that a similar situation arose in the first week of October 2008 (during the global financial crisis) when mutual funds faced liquidity stress.
Government immediately consulted RBI, SEBI, IBA, AMFI and others. An urgent meeting of the FSDC was convened and a solution was found by the end of the day," he added.
"The next morning, officers of RBI and SEBI met and the RBI announced a 14-day special repo facility.
The situation was resolved".
His remarks came two days after Franklin Templeton Mutual Fund voluntarily decided to wind up its six debt schemes due to liquidity issues amid the coronavirus crisis.
The funds which will be shut are Franklin India Low Duration Fund, Ultra Short Bond Fund, Short Term Income Plan, Credit Risk Fund, Dynamic Accrual Fund, Income Opportunities Fund, the company said in a statement.
"There has been a dramatic and sustained fall in liquidity in certain segments of the corporate bonds market on account of the Covid-19 crisis and the resultant lockdown of the Indian economy which was necessary to address the same," it said.