Interesting development, Mutual funds to get to borrow 20,000 cr from RBI at 9% to avoid distress selling securities at low rates, which translates to the FM asking them not to sell under the redemption pressure & to keep propping the market... I dont understand how can the Mutual funds be allowed to borrow monies ?? This may be a temp relief but can lead to many MF's going belly up if markets crack further...
I doubt, if there counter parts here do otherwise. Why else the 'nav's of most of the funds go negative as the markets fall.... atleast for that period? Do they NOT have sufficient machinery to carry out appropriate analysis, to get out in time, or is every thing "Ram Bharose"
And if so, then.... they definately need to borrow.... and borrow real heavily in the current situation.
Cheers!
SS