New Delhi: The cabinet committee on economic affairs (CCEA) is meeting on 31 August 2002 to finalise the bailout package for Unit Trust of India (UTI) to enable the mutual fund to meet liabilities on its flagship US-64 and assured return schemes.

The package is likely to be Rs 6,400 crore to meet the shortfall arising out of the difference between the net asset value and guaranteed price per unit as on the date of redemption. Besides, a line of credit of Rs 1,400 crore has to be arranged from banks to meet the monthly income plan (MIP-97) redemption in October 2002-end.

The government has already given Rs 800 crore cash support to UTI in two tranches for meeting redemption pressure under US-64. An additional Rs 500 crore will be required this financial year for US-64. For the MIP-97 scheme maturing on 1 September 2002, the government has provided a sovereign guarantee of Rs 1,000-crore line-of-credit from banks.

UTI trustees have decided to keep the books of the MIP-96 (IV) and the Deferred Income Plan (DIP) 1991 open for two years from the date of their maturity. This was done with a view to passing on the benefits of probable recovery from the non-performing assets (NPAs) and illiquid equity shares of these two schemes.

Indias largest mutual fund player was actively pursuing the recovery of NPAs, and recoveries will be distributed to all unit-holders over the period after deducting the applicable costs.

This distribution will be over and above the terminal values already paid to the unit-holders of MIP-96 (IV) and DIUP-91. The gross NPAs and illiquid equities are to the tune of Rs 22.42 crore and Rs 73.97 crore under DIUP-91 (99,724 unit-holders) and MIP-96 (IV) (2.95 lakh unit-holders), respectively.