If the psychology does not come out right the real problems could get a good deal worse. So the first thing to attend to is the confidence of those who have invested in the scheme, 25 million of them, individuals, private and public companies and financial bodies. That means ensuring that too many of them don't catch cold at the same time. It means making exits smooth for those who are so inclined and UTI appears to be managing thiswell so far.

Everyone else should be persuaded there is life and good returns in US-64. This may take a little more doing given the gloom in the stock market, some of it caused by UTI itself. What should help are changes in investment strategies (subtly carried out, not shouted from the rooftops), calling on corporates for a return of past and present favours (stressing mutual interests) and supportive language and action from the government (whose chestnuts UTI has often had to pull out of the fire) plus a host of other measures.

Alongside all this UTI should have something credible to say to all the crusaders who are making so much play in the market by demanding it be turned into an ordinary or garden variety of mutual fund, shorn of special privileges and its present opacity. What Subramanyam could say is that UTI has every intention of reconstructing its house when sunny days return.

Coinciding with post-Pokharan sanctions and turmoil in Asian financial markets, the UTI's June annual audit reportrevealed US-64 reserves had turned negative for the first time in its history.

This underlined what many suspected about management of the scheme but could not prove because alone among mutual funds UTI is not obliged to report net asset values or other relevant information. Consequent to confirmation that US-64 sale and repurchase prices have no relation to its NAV, a new clamour has broken out for transparency and full disclosure. To this Subramanyam has responded with the classic defence, in effect, that the US-64 is in a class by itself.

This is true in more than the obvious sense. Its weight makes UTI a strategic player in the market with responsibilities going beyond those of other funds.

Just as its premier position benefits investors, markets, corporates and the economy alike during the good times, so there are wide repercussions when UTI hits a rough patch. It does not follow that the form of disclosures applicable to other funds are necessarily the best means of regulating an entity as largeas UTI. At the same time, sheer size and relentless growth do not make UTI immune to the risks of the market and bad management decisions. Something needs to be done; the question is what.