Sinha also denied that the government was toying with the idea of creating a special purpose vehicle for bailing out the UTI and said the government had constituted three committee to look into the functioning of the organisation.

Responding to a calling attention motion by BJP member Narendra Mohan on erosion in UTI's NAV, finance minister Yashwant Sinha, however, said certain schemes of UTI like US-64, Unit-linked insurance plan and Charitable Religious Trust Scheme (CRTS) were not NAV driven.

Moving the motion, Mohan wondered why the non-performing assets (NPA) of UTI were not being made public and said the NAV of US-64, reports about which triggered redemption pressure on UTI, should be made public to stem erosion of faith in the mutual fund.

Sinha said the 20 percent dividend amounting to Rs 3,125 crore announced in June under US-64 scheme was out of the net income of Rs 3,222 crore earned during the year. Sinha said dividends on Unit Trust of India's (UTI) US-64 scheme were not paid out of reserves and assured greater transparency in the functioning of the UTI.

"We are working in the direction of bringing in greater transparency in the UTI. Whatever lacunae exists will be done away with", Sinha said replying to a calling attention on the functioning of UTI in the Rajya Sabha.

Stating that NAV of schemes, which invest in equity, bonds and other money market instruments, fluctuate with the market value of underlying assets, Sinha said of the 21 equity funds managed by UTI, 18 had outperformed BSE Sensex.

The minister admitted that the latest balance sheet of US-64 showed a depreciation in the value of investment to the tune of Rs 3,566 crore and said it was on account of adverse movement in stock prices.

Mohan said UTI schemes should be brought under thepurview of Securities and Exchange Board of India (SEBI) just as other mutual funds. At present, Sebi has no control over UTI schemes since they were set up under the UTI Act of 1963.

He said UTI had pegged the redemption value of the US-64 unit at Rs 14.50 as against a real value of Rs 9.50. He wanted to know how the government proposed to bridge the gap.

Referring to the demand of some members to set up a joint Parliament committee to enquire into the functioning of UTI, Sinha said this did not arise as there is no "scandal or scam". Whatever losses had been shown in the account were only "notional losses" which could turn into profits once the capital market is bullish, he said.

Sinha maintained that there was no political pressure for appointment of chairman of UTI nor there was any government interference in the day-to-day functioning of the UTI as it was a autonomous body. Sinha refuted the charge that the pension funds were being invested in the UTI and asserted the government was not allowingsuch investments.

To the demand of the members that UTI brought under the surveillance of the Sebi just as other mutual funds, the minister said functioning of the UTI equity schemes were being monitored by the Sebi since early 1994.

Gurudas Das Gupta (CPI) said UTI had been consistently dipping into its reserve funds to pay dividends, and added the UTI act should be amended to make the institution more transparent and accountable.

Attacking the government for trying to cover up the whole UTI crisis, he alleged the finance minister was lacking in transparency just like the UTI management.

He also alleged decisions taken by the UTI board about purchasing particular shares were regularly being leaked to market players and corporates.

It is a paradox that the government is allowing UTI to take "market decisions" while standing guarantee on the units, Das Gupta said.

Janeshwar Mishra (SP) said the Reserve Bank of India (RBI) should give a guarantee that UTI would not be liquidated. UTI 77 schemes outof which six were offshore scheme and the rest domestic funds.

The finance minister said the notional fall in the value of US-64 was on account of the general bearish phase of the capital marked worldwide.