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UTI set to retire girl child's gift

Ashok Jainani

MUMBAI, Sept. 6

THE Unit Trust of India (UTI) has decided to terminate Rajlaxmi Unit Scheme-1992 (RUS-92), which was launched in October 1992 for the benefit of the girl child and received support as a family welfare measure from the Rajasthan Government.

RUS-92, with investors' assets of over Rs. 525 crores under management, stands terminated effective October 1, 2000. Investors under the scheme would be paid ``implicit'' assured returns up to September 30. The scheme offered growth at an assured rate ov er 16-20 years depending upon the age at the time of investment.

``The assured returns would be paid without recourse to reserves,'' the UTI Executive Director, Mr. B.G. Daga, told Business Line.

The UTI trustees have decided to terminate the scheme as the rate of return offered during its launch was based on estimated returns of about 17 per cent from capital market instruments. However, with various developments in the capital markets, interest rates have fallen substantially from the levels that prevailed in 1992.

RUS-92 cannot be continued as a gift to the girl child but UTI has given investors the option to reinvest the funds in a similar scheme -- Children's College & Career Fund, which is to be renamed as Children's Career Plan.

Following the policy of moving away from assured returns over a long period, UTI is also expected to terminate RUS-94 and RUS-99, variants of RUS-92, in the near future.

UTI has suspended fresh sales under RUS-94, with implicit assured returns of over 14 per cent, and RUS-99, with assured returns of over 12 per cent. RUS-94 has investors' assets of over Rs. 418 crores under management and RUS-99 over Rs. 157 crores.

The Rajasthan Government supported RUS-92 by donating Rs. 1,500 to each person going in for sterilisation in the form of units of RUS-92. After its success in Rajasthan, the scheme was introduced in other States as well and the two variants, RUS-94 and R US-99, were launched.