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UTI gets two weeks to devise US-64 exit plan

The government has given the Unit Trust of India two weeks to devise a way of allowing small investors to redeem units in its biggest fund, a senior fund official told Reuters on Thursday.

UTI on Monday suspended redemptions in the fund, US-64, for the remainder of the year. The government wants the suspension lifted for small investors.

"We have agreed to look at various options whereby small unit holders redeem their units before the six-month suspension period ends," a senior Unit Trust of India official said.

UTI suspended redemptions from the monster fund following a big increase in withdrawals in recent months. Some Rs 59.62 billion in the year to June, including Rs 41.51 billion in April and May alone.

The state-run UTI manages Rs 600 billion in assets, about two-thirds of the mutual fund industry's total assets.

It has about 41 million investor accounts through its wide range of 87 funds.

US-64 is UTI's flagship fund, and accounts for one-fourth of its assets and about 15 per cent of the industry's assets.

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