Moratorium-linked uncertainty puts debt mutual funds in jeopardy

The moratorium-joined uncertainty in excess of non-banking money organizations (NBFCs) could direct to credit score events or rating motion on exposures of personal debt mutual funds (MFs), which keep Rs 51,014 crore of bond exposures to NBFCs in in close proximity to-phrase maturities.

According to the data from the Securities and Trade Board of India (Sebi), MFs experienced Rs 1.38 trillion personal debt exposure to NBFCs, of which Rs 51,014 crore was in significantly less than ninety-day personal debt papers, as of March 31, 2020.

“Larger-sized NBFCs, with robust parentage, will be capable to tide in excess of the liquidity crunch even with lack of moratorium from banking companies. Nevertheless, mid- and tiny-sized NBFCs can experience speedy issues in their asset-liability profile,” mentioned a personal debt fund manager.

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