RBI report: Debt schemes of 17 mutual fund companies found stressful

All is not well in the rapidly growing mutual fund. RBI report indicates that in April, 43 debt schemes of 17 mutual fund houses experienced stress higher than the mandated level of AMFI. Their assets under management (AUM) are over 2.25 lakh crores. However, this stress does not mean that investors' money will be lost or there is any risk.

Association of Mutual Funds in India (AMFI) tests the stress of open-ended debt schemes of fund houses every month on various parameters ranging from liquidity to investment. This test has been cited in RBI's report. According to the report, 269 schemes of 31 fund houses had stress below the prescribed limit.

Thus, a total of 312 schemes of 48 schemes were tested, whose AUM was Rs 16.84 lakh crore. The Securities and Exchange Board of India (SEBI) has made it mandatory for asset management companies to stress test open-ended debt schemes every month to evaluate the impact of various risk parameters (interest rate, credit and liquidity risks) on their net asset values. When such stress is above the limit, the concerned fund manager is given one month's time to improve it.