The implementation of the debt-base developed by CRIS -- the research arm of Credit Rating Information Services of India Ltd (Crisil) -- analysts feel, would enable all mutual funds adopt a uniform mode of computing YTM. Most MFs are seen declaring lower net asset values (NAVs) as a result.

The debt-base developed by CRIS has a comprehensive data-base on over 2,500 government and corporate debt securities, which is updated on a daily basis. This would help subscribers to the database calculate the YTM and yield curves on their securities portfolios at any time during the financial year. ``Since all MFs adopt their own formula to create provisions on their investments in securities, they end up declaring wrong NAV positions,'' says an analyst atCRIS.

CRIS is in talks with banks to adopt its debt-base in order to make computation of YTM easier. According to the current practice, the Reserve Bank announces a YTM for banks at the end of each financial year, based on which they create provisions on their investments.

However, after the Securities & Exchange Board of India (Sebi) made it mandatory for listed companies to announce their results on a quarterly basis, listed banks have been finding it difficult to compute the YTM on their securities holdings for each quarter.

With almost all banks creating provisions on their investments based on their own estimates at the time of announcing quarterly results, the net profit figures have given a rather skewed picture. The adoption of the CRIS debt-base, it is felt, will make calculation of provisioning on investments easier. A few foreign banks have already expressed their willingness to subscribe to the CRIS debt-base.

The CRIS debt-base would help subscribers know the primary market yields fordifferent categories of rated paper and privately placed issues and also the secondary market yields based on the last closing prices for different categories of rated paper. Subscribers would also be able to find out the spreads of triple-A rated corporate paper over government yields and also the tenor-wise yields on government dated securities over the past two years.