The trust faced repurchases of Rs 70-80 crore on Friday, Rs 12 crore on Saturday and Rs 60-70 crore on Monday. ``As compared to the total corpus of US-64 at Rs 22,000 crore repurchases of Rs 650 crore is a very small part of the total corpus. It is only 2.95 per cent of the total corpus,'' said a UTI official.

It is learnt that more than 50 per cent of redemptions were from the Western region, mainly Maharashtra and Gujarat. Although big corporates have not redeemed US-64 units, some companies have reportedly redeemed US-64 in small lots. ``There is no redemption pressure as made out by the media,'' UTI officials said.

Meanwhile, investor confidence in US-64 got a shot-in-the-arm followingreports that banks would be investing a huge amount in the scheme. ``The finance ministry proposal to pump in about Rs 10,000 crore through public-sector banks in US-64 scheme will turn the tide in favour of UTI,'' said an investor.

Market sources said the proposal, if implemented, will help the scheme regain a profile in keeping with its earlier image as an income plan.

According to the plan drawn up, in return for subscription in US-64 from banks, the trust will purchase bonds issued by public-sector banks, which will carry a fixed coupon. By subscription to the bonds, the trust will enhance its stream of debt income, which will help align the sale/repurchase price in line with the scheme's net asset value over the long term.

In addition, the composition of the profile will get corrected. The ministry feels that the profile of US-64, which is now skewed in favour of equity, needs to be corrected. This stems from the thinking that the scheme is meant to be an income plan and not a growth avenue.

Theministry views the plan to infuse funds through banks as a win-win idea, particularly because there is no cash outgo from the system. It is unlikely to be detrimental to banks as they are now facing a problem of acquiring good assets.

The proposal will serve three worthwhile objectives. With the acquisition of bank bonds, US-64 will have a larger proportion of debt in its investment portfolio. This will reduce the volatility of its income arising from over investments in equities. Correspondingly, US-64 will not have to sell equity in a big way to cover the outgo on repurchases. This will help the secondary markets. Last, heavy bank investment in US-64 will boost the confidence of individual unit-holders. The bond recapitalisation plan will bridge the gap between the net asset value and the sale/repurchase price of the scheme. Now with the net asset value ruling below the sale/repurchase price, the new investor is essentially allowing earlier investors to exit from the scheme at a higher price. By keepingthe sale/repurchase price over the net asset value, new investors are being overcharged.