RBI extends loan facility for mutual funds

A poor response from banks to the special short-term lending (repo) facility has prompted the Reserve Bank to extend the scheme till Rs 20,000 crore is fully subscribed for on-lending to mutual funds. The 14 days special facility will now be conducted everyday until further notice up to a cumulative amount Rs 20,000 crore for the same purpose, the central bank said in a release. The special window was introduced with the objective of providing liquidity to the mutual fund industry facing redemption pressure on account of withdrawal from their debt instruments and money market instruments.