UTI Mutual Fund to set up ARC

UTI Mutual fund (UTIMF), the largest mutual fund in the country, will begin 2004 with nil non-performing assets (NPAs).

It is setting up an asset reconstruction company, ASREC, with an initial capital paid-up capital of Rs 5 crore. Further, it plans float six new schemes in few months.

Meleveetil Damodran, chairman and manging director, UTIMF said, "From December 31,2004 UTIMF will have zero NPAs. And from there onwards, every recovery will push up the net asset value (NAV) of the schemes."

Damodaran also informed that the new company will be floated by the UTI Asset Management Company, which will specialise in recovery of non-performing assets.

The company will have an initial paid-up capital of Rs 5 crore. "The Life Insurance Corporation of India (LIC) will pick up a 10 per cent stake in the company and other institutions are likely to join later," Damodaran added.