The RBI said that all affected funds have either rectified the breaches or initiated remedial measures within the prescribed timeline, underlining the sector’s ability to manage risks proactively
The Reserve Bank of India’s Financial Stability Report (FSR) indicates that the mutual fund industry remains broadly resilient despite a rise in the number and size of debt schemes breaching prescribed stress-test thresholds. The report noted that 44 open-ended debt schemes, with total assets under management (AUM) of ₹3.18 lakh crore, breached the thresholds set by either the Association of Mutual Funds in India (AMFI) or individual asset management companies (AMCs) in March 2026. This is higher than 43 schemes managing ₹2.25 lakh crore that breached the limits in April 2025.
remedial measures
The RBI said that all affected funds have either rectified the breaches or initiated remedial measures within the prescribed timeline, underlining the sector’s ability to manage risks proactively.
Liquidity risk indicators also remained largely comfortable. The two key measures — Liquidity Ratio-Redemption at Risk (LR-RaR) and Liquidity Ratio-Conditional Redemption at Risk (LR-CraR) — stayed above the regulatory thresholds for most debt schemes in both years. Any exceptions were addressed promptly by AMCs.
Stress tests of equity funds showed mixed trends. In April 2026, the time required to liquidate 25 per cent of portfolios in the largest mid-cap schemes ranged from 5 to 23 days, compared with 4 to 20 days in 2025. However, for smallcap funds, the range improved to 7 to 33 days, from 13 to 35 days a year earlier, indicating somewhat better liquidity conditions despite continued concerns around market depth in smaller stocks.
Overall the FSR assessment for 2026 suggests that while stress-test breaches increased in scale, mutual funds remain operationally resilient with effective risk-management mechanisms in place.
Published on June 30, 2026