Something about Mutual Funds

RBI has announced INR 50,000 cr liquidity to MFs (mutual funds).

This decision has been taken because a company (Franklin Templeton Asset Management Pvt. Ltd) which runs mutual funds has cleared INR 26,000 cr debt funds.

According to AUM (assets under management), Indians have invested a total amount of INR 15, 00,000 cr in debt funds.



Mutual funds: Take an example; you have deposited some fixed deposit in your savings account. Bank will pay you interest either annually or monthly. In the same way, you can invest money in Mutual funds through which you will earn money.

Money earned through mutual funds is quite high compared to fixed deposits.

Liquidity: The money which a mutual fund requires for maintenance, salaries of their employees, redeeming their customer’s investment, transaction fees, commission payments.

Debt funds: This is almost equal to your fixed bank deposits. Wherein banks, you are charged for redeeming money within the stipulated time period. But, as far as debt funds are concerned, the depositor can redeem on any working day without charge

FAQ:

Q- How a mutual fund earn money/ from where it earns to meet earnings higher than banks?

Ans- The money lent by mutual funds are invested in companies, through which they yield profits.

Q- what is the security in mutual fund investment?

Ans: You will have securities in mutual funds. This will be either provided by the government or through corporate bonds.

Q- Why are mutual funds winding debt funds?

Ans: Simple answer- Companies are closed, no investment is no profit.

Coming to the actual topic,

Yes, RBI announced funds for liquidity. But, will RBI directly fund to Mutual funds? The answer is NO. RBI funds to bank and then Banks will fund Mutual funds as credit.
The problem arises is, many banks in India are already in debt. They are no more interested to take it further. So, if banks are not willing to credit money to mutual funds, what makes the change with RBI’s initiative?

RBI is cognizant of banks’ negative response in taking credits. So, they came up with some interesting norms which will persuade banking industries to lend money and credit mutual funds.
This blog is authored by Company Secretary Ronak Gupta. He is author of many blogs and runs many websites and youtube channels. His work is dedicated to corporate laws, legal, secretarial, professional services and also in strategy formulations for corporates. Mail him at: csronakgupta23@gmail.com or call at :9910226715

Comments

Post a Comment

Popular posts from this blog

DIR 8 Intimation by Director

Image
FORM 'DIR-8' Intimation by Director  [Pursuant to Section 164(2) and rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014]   Registration No. of Company Nominal Capital           Rs.  Paid-up Capital Rs.  Name of Company Address of its Registered Office     To, The Board of Directors of XYZ Private Limited I, ________ son/daughter/wife of  __________  resident of  ________________ , Director/Managing Director/Manager in the company hereby give notice that I am/was a director in the following companies during the last three years:-   S.No Name of the Company Date of Appointment Date of Cessation 1   I further confirm that I have not incurre...
Read more

H-1B visas

H-1B visas are issued by U.S. H-1B recipients can only remain in the country legally for 60 days without being paid. About three-quarters of H-1B visas go to people working in the technology industry, though the exact levels vary year by year. H-1B visas, are tied to a specific location and employer who commits to paying the recipient a minimum salary. Furloughing recipients, reducing their wages, and in some cases allowing them to work from home violates visa requirements. H-1B workers who are terminated have 60-days to find another job, transfer to a different visa or leave the country. God is with them, everything will be alright. O-1 visa, which is designated for individuals with extraordinary ability.
Read more

Median Salary Disclosure procedure

This article is about the calculations involved in the disclosure of section 197(12). Also read on for clarification on the median calculation related to this section, which is commonly found in the Annual Report of Listed Companies.  This write-up will guide you through the process of calculating and understanding the median disclosure required in the Board Report. 📜 Legal Requirement u/s 197(12) Every Listed companies must disclose the ratio of each director’s remuneration to the median remuneration of employees in their Board’s Report.  But how is the median remuneration calculated? Let’s break it down step by step. 👇 The median is the middle salary value when all salaries are arranged in ascending order. Unlike the mean (average), the median is not affected by extreme high or low salaries, making it a more accurate representation of the typical employee salary. 🔹 Step 1: Gather Salary Data Collect the annual salaries of all permanent employees in the company. 🔹 Step 2:...
Read more