A massive outflow from liquid funds left the mutual fund industry short of Rs 2.3 lakh crore in September, according to the data from the Association of Mutual Funds in India (AMFI).

Going by the data on AMFI, outflows from liquid funds alone totalled Rs 2.11 lakh crore. Liquid funds or money market segment invests in cash assets such as treasury bills, certificates of deposit and commercial paper for a shorter horizon.

Fears of a liquidity crunch following the IL&FS crisis hit the mutual fund industry in September. Cash plans or liquid funds were the worst hit.

MF experts said industry faced huge redemption pressure in September after liquidity in the banking system tightened.

The liquidity crunch was largely attributed to the advance tax payments coupled with default in payments by IL&FS.

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