The Reserve Bank of India’s decision to open a special facility to ensure the availability of adequate liquidity for the mutual fund industry is a timely move in signalling to investors that the central bank is alert to the need to preserve financial stability in these challenging times. In assigning ₹50,000 crore exclusively for commercial banks to lend to mutual funds, the RBI made clear on Monday that it wants to tamp down on any build-up of liquidity strains at mutual fund houses in the wake of heightened volatility in the capital markets and increased redemption pressures as a fallout of the COVID-19 pandemic. The proximate trigger for the central bank’s move was last week’s announcement by Franklin Templeton Mutual Fund that it was winding up six debt funds — funds that collectively had assets under management (AUM) amounting to about ₹26,000 crore. The RBI has rightly recognized the urgent need to ward off any incipient contagion impact from the closure of these six funds.

From the above passage, we can infer that: