NEW CLUES:-

Clue 1: In an effort to kick start the mutual funds industry UTI was established by an
Act of Parliament (1963)

Clue 2: RBI’s first scheme was Unit Scheme, this scheme becomes the most popular
savings schemes (By 1988)

Clue 3: Kethan Parekh scam hit the markets, this leads to huge decline in stock prices
which causes mutual funds to suffer too (Early 2001)

Clue 4: a face value of Rs 10, the actual value of a unit was down to Rs 6. This implies
(Early 2005)

Clue 5: The then finance minister Jaswant Singh firmly announced “We will honour all
our commitment in UTI.” (September 2002)

Clue 6: The committee divided the scheme into 2 parts, one to house the stressed
assets that had fallen below their quoted part and the other to house the healthy
assets to be managed profitably. (September 2002)

Clue 7: With the markets rising, over the next six years the companies managing the
residual portfolios paid back all their dues to the government and when the bonds
finally came up for redemption (in May 2008),
TIMELINE

(1963)

UTI gets a 24 year head start and builds a large base of investors with assets of 6700
crore

(By 1988)

US-64 scheme awards its unit holders with generous dividends

(Early 2001)

With unit holders falling over each other to encash their holdings, US-64 came under
severe redemption pressure.

(Early 2005)

UTI was close to a collapse that would jeopardise savings of nearly 20 million middle
class Indians

(September 2002)

A Cabinet Committee on Economic Affairs cleared a Rs 14,561 crore bailout package

for the stricken company.

(Late September 2002)

All the unit holders were given the option to redeem their units at par either for cash
or convert them to six-year tax-free, interest-bearing bonds.

(in May 2008)

the government ended up with decent profits on the whole deal.