The sharp and sudden fall in the value of US-64 investments was due to the fact the stock index fell by 21.5 per cent during May 5 to June 30, 1998. India had conducted nuclear tests on May 11 and May 13. The depreciation since then upto June 30 was Rs 3,566 crore, the letter said.

``There is nothing to panic and investors should not believe in what was appearing in newspapers,'' UTI officials were saying as investors rushed for US-64 redemptions for the second consecutive day on Tuesday. Redemptions since yesterday, amounted to Rs 40 crore since the reports on erosion inUS-64's corpus made news.

``While considering the accounts at the meeting of the board of trustees of UTI held on September 25th, 1998 it was decided that the depreciation in the value of investment of Rs 2,566 crore to be charged to the reserves account of US-64. Consequently, the reserve account has shown a negative balance of Rs 1,098.49 crore.''

``The hidden value of a portion of portfolio in US-64 relating to the real estate has not been taken into account. The board was of the view that the sharp and sudden fall was market aberration and when corrections take place in due course the negative balance in the reserves account would get wiped put,'' the Chairman said.

The chairman emphasised further that after June 30, there has been fresh accretion of about Rs 950 crore to US-64 due to net income earned and credit to reserves on account of US-64 unit sales during July-September 1998. The Development Reserve Fund (DRF), which has been created in the books of UTI have not been touched for incomedistribution under US-64. DRF continues to be a sort of safety net for assured income schemes of UTI.