New Delhi: Securities and Exchange Board of India (SEBI) said on April 25 it will safeguard the interests of investors in UTI which apparently is under strain to redeem Monthly Income Plan (MIP) of 1997 by April end.

After the SEBI's board meeting in New Delhi on April 25, chairman G N Bajpai told reporters, "UTI was discussed. Our job is to take care of the investors' interest. We will take care of it".

He declined to comment on the outcome of the meeting, saying, "I don't want to give details as the discussion is privy to the members of the board. Whatever is necessary to communicate, we will do it at the appropriate time".

Indications are that the regulator would insist on UTI to make timely repayment to investors.

SEBI might also permit UTI to float a new scheme to provide a switchover option to unit holders of the close-ended MIP scheme of 1997 that matures on April 30, as part of efforts to provide some relief to the fund.

The country's largest mutual fund has applied to SEBI for launching a new monthly income scheme exclusively for MIP-1997 investors. MIP-1997 unit holders can also opt for reinvestment option in any other UTI scheme open for sale.

UTI's MIP-1997 had a corpus of over Rs 1,400 crore as on December 31, while its market value was about Rs 980 crore.

The scheme is likely to run a shortfall of over Rs 400 crore.

UTI was in talks with LIC, SBI and IDBI for bringing in the additional funds.

Even if UTI does not get the funds from the financial institutions, it can still draw upon the trust's Development Reserve Fund assistance.

PTI