● Recently, the Securities and Exchange Board of India (SEBI) has introduced the ‘Corporate Debt Market Development Fund’ to prevent financial crisis.
About :
● The ‘Corporate Debt Market Development Fund (CDMDF) is a backstop facility for specified debt funds during market dislocations.
● The fund is intended to provide liquidity support in the event of a financial crisis.
● The proposed CDMDF will have an initial corpus of Rs 3,000 crore contributed by mutual funds.
● The government has approved a 10-time leverage of the fund (Additional corpus), thus CDMDF may raise funds up to Rs 30,000 crore.
● Contributions to the fund can be done by the specified debt-oriented mutual fund schemes and asset management companies of mutual funds.
● This fund is guaranteed by the National Credit Guarantee Trust Company (NCGTC) and the backstop facility will be managed by SBI Mutual Fund.
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