Days after Franklin Templeton Mutual Fund decided to close six of its debt schemes, the Reserve Bank of India has announced a Rs 50,000 crore special liquidity facility for mutual funds. In a statement on Monday, the central bank said heightened volatility in capital markets in reaction to COVID-19 has imposed liquidity strains on mutual funds (MFs), which have intensified in the wake of redemption pressures related to closure of some debt MFs and potential contagious effects therefrom. The stress is, however, confined to the high-risk debt MF segment at this stage; the larger industry remains liquid, it said.

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"With a view to easing liquidity pressures on MFs, it has been decided to open a special liquidity facility for mutual funds of Rs 50,000 crore," it said.

The Reserve Bank of India (RBI) also stressed it remains vigilant and will take whatever steps are necessary to mitigate the economic impact of COVID-19 and preserve financial stability. The RBI has taken several steps including a cut in repo rate and reverse repo rate to provide some relief during the ongoing crisis. It had also announced an EMI moratorium of three months. 

Coronavirus cases on rise

The number of coronavirus cases are on a rise in India despite the ongoing lockdown. A total of 27,892 people have been infected so far, the Ministry of Health and Family Welfare said on Monday. In a morning update, the Health Ministry said, of the total cases at least 20,835 are active. A total of 6,184 individuals have been cured and discharged while 872 people lost their lives.

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PM Modi to meets CMs

Meanwhile, Prime Minister Narendra Modi on Monday held a video conference with chief ministers to discuss the situation. This is Modi's fourth such interaction with state chief ministers since March 22 when he discussed coronavirus situation and steps taken -- both by the Centre and the states -- to contain the pandemic. 

On March 24, the prime minister had announced a 21-day lockdown, which was further extended till May 3 later. In a tweet on Monday, the Prime Minister's Office said Modi and the chief ministers will be discussing aspects relating to the COVID-19 situation.