New Delhi: The finance ministry on Wednesday permitted PSUs to invest their surplus funds in debt-based schemes of private sector mutual funds. It also added that this move will help them diversify their investment portfolio. So far, PSUs were allowed to invest their surplus fund in SEBI-regulated public sector mutual funds. The Department of Investment and Public Asset Management (DIPAM) has issued modified guidelines on investment of surplus funds by PSUs wherein it said that “Maharatna, Navratna and Miniratna PSUs are permitted to invest in debt-based schemes of SEBI regulated mutual funds”.
DIPAM modified guidelines in view of liberalisation of policies & introduction of new monetary instruments
DIPAM said the guidelines have been modified in view of the representations received from some PSUs, mutual funds, and private sector banks suggesting changes in certain provisions keeping in view liberalisation of policies and introduction of new monetary instruments for trade in short-term funds.
These proposals have been examined by the inter-ministerial Committee for Monitoring of Capital Management and Dividend in CPSEs (CMCDC) which currently considers all capital restructuring matters of PSUs.
Surplus funds refer to funds available with PSUs after meeting the business requirements, including operating expenses, tax payment, working capital, debt servicing and capital expenditure.
PSUs can invest in treasury bills, G-Secs, term deposits or commercial papers
Besides mutual funds, the guidelines permit PSUs to invest in Treasury bills and G-Secs, term deposits in commercial banks, certificate of deposit or commercial papers issued by banks.
The original guidelines on investment of surplus funds by PSUs were issued by the Department of Public Enterprises in May 2017. It deals with management of surplus funds to prevent it from lying idle and instead generate returns.
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