The credit lines opened by the Reserve Bank of India (RBI) for debt mutual funds (MFs) saw limited participation, with Rs 2,430 crore of the Rs 50,000-crore liquidity window utilised.
According to industry participants, MFs showed preference for selling securities to banks and other counter parties, instead of availing of fresh borrowing through RBI’s credit lines.
“MFs looked to sell debt papers in the markets to banks or other counter parties. As a result of this selling, debt papers of some non-banking financial companies (NBFCs) had also seen some spike,” said a debt fund manager.
On April 27, the RBI