PSUs to lend a hand in troubled times

Author: MP Rana

Government is leaving no stone unturned to prevent the market situation from worsening. The most recent move of not allowing the redemption of MF investment done by PSUs (Public sector banks). The cause behind this is the substantial magnitude of investment by PSUs that is locked up in MFs, which can be up to Rs 2 lakh crore. The act may be an outcome of NTPC’s act to get its Rs.1,000 crore MF investment redeemed. Fear is that if everybody follows this, whatever is there in the name of ‘liquidity’ would go away altogether.

The domestic institutional investors also did their bit in saving market from crashing. The group bought Rs.1,407 crore out of an amount of Rs.2,191 crore that resulted from sudden selling of stocks by FIIs; all within two days.
	Previously, the Government ordered the PSUs to have a minimum of 60% of investment with the Public Sector Banks. The decision has been welcomed by Public sector MFs. The permission from Government to allow PSUs to make investments in MFs came after the clan explained the necessity of Public Sector to compete with the private sector. So, now in addition to investing in treasury bills, fixed deposits and RBI bonds, PSUs could earn from stock market too.