Finance Ministry allows PSUs to invest in debt schemes of all mutual funds
New Delhi: The Finance Ministry through a memorandum on Tuesday allowed Public Sector Undertakings (PSUs) to invest in debt schemes of all mutual funds.
Earlier, the Central Public Sector Enterprises (CPSEs) were allowed to invest in mutual funds where the government held 50 percent or more shares.
“The period of maturity of any instrument of investment shall not exceed one year from the date of investment, except in case of term deposits with banks and government securities where it can extend up to three years,” it added.
The Department of Investment and Public Enterprises (DIPAM) said the guidelines are based on proposals received from CPSEs, mutual funds and private sector banks.
“The proposals were examined by the inter-ministerial Committee for Monitoring of Capital Management and Dividend, which currently considers all capital restructuring matters of CPSEs,” it added.
DIPAM said that only Maharatna, Navratna and Miniratna CPSEs are permitted to invest in debt-based schemes of mutual funds.
State-owned banks and insurance companies don’t fall under the ambit of the new guidelines.
The surplus funds would be invested following the principles of safety of funds and due diligence.
The fresh guidelines issued by DIPAM on the investment of surplus funds by CPSEs replace the previous guidelines issued by the department of public enterprises in 2017.
IBNS
Senior Staff Reporter at Northeast Herald, covering news from Tripura and Northeast India.
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