In an effort to soothe nerves of the country’s mutual funds (MFs) and the non-banking finance companies (NBFCs), the bankers today assured that they would come forward to support these financial institutions’ funding needs including liquidity to meet redemptions. With an access to additional Rs 40,000 crore of liquidity after the central bank’s slew of liquidity measures yesterday, the public sector banks today said that it is extremely comfortable for the banks to fund the MFs and NBFCs, and also to achieve a higher credit growth during the financial year.

“The Reserve Bank of India’s (RBI’s) recent measures will address the issues of the MFs and the NBFCs with a lot of ease. After assessing the whole situation and holding discussions with the Association of Mutual Funds in India (AMFI) on Friday, we are urging the MFs and the NBFCs to approach the banks and voice their problems. The fear of redemption pressure with the MFs will now be done away with,” said K Ramakrishnan, chief executive, IBA.

“Now we have Rs 60,000 crore of liquidity in the system, and the MFs and NBFCs could take advantage of this to meet their redemption needs,” said M V Nair, CMD, Union Bank of India.

About a month back, the mutual funds had raised concerns about meeting the redemption requirements, especially with the fixed maturity plans (FMPs) and the liquid funds, where the money is invested in the instruments like certificate of deposits (CDs) and commercial papers (CPs) issued by banks