“India Ratings and Research (Ind-Ra) has assigned a credit rating of “IND AAAmfs” to “Franklin India Banking and PSU Debt Fund”. Ind-Ra’s Bond Fund Ratings include two measures of risk, to reflect better the risks faced by fixed-income investors. The fund credit rating measures vulnerability to losses as a result of credit defaults, and is primarily expressed by a portfolio’s weighted average (WA) rating. A complementary fund volatility rating measures a portfolio’s potential sensitivity to market risk factors, such as duration, spread risk, currency fluctuations and others. Credit and volatility ratings are typically assigned together. The ratings include other fund-specific risk factors that may be relevant. These risk factors include concentration risk, derivatives used for hedging or speculative purposes, leverage, and counterparty exposures. Ind-Ra assesses the fund manager’s capabilities to ensure it is suitably qualified, competent and capable of managing the fund. India Ratings will not rate funds from managers that fail to pass this assessment. Ind-Ra requests monthly portfolio holdings and relevant performance statistics in order to actively monitor the ratings. Ratings do not guarantee the return profile or risk attached to the investments made. Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan or security or any issuer. Ratings do not comment on the adequacy of market price, the suitability of any investment, loan or security for a particular investor (including without limitation, any accounting and/or regulatory treatment), or the taxexempt nature or taxability of payments made in respect of any investment, loan or security. India Ratings is not your advisor, nor is India Ratings providing to you or any other party any financial advice, or any legal, auditing, accounting, appraisal, valuation or actuarial services. A rating should not be viewed as a replacement for such advice or services.

All investments in debt funds are subject to various types of risks including credit risk, interest rate risk, liquidity risk etc. Some fixed income schemes may have a higher concentration to securities rated below AA and therefore may be exposed to relatively higher risk of downgrade or default and the associated volatility in prices which could impact NAV of the scheme. Credit rating issued by SEBI registered entities is an opinion of the rating agency and should not be considered as an assurance of repayment by issuer. There is no assurance or guarantee of principal or returns in any of the mutual fund scheme.

This scheme has exposure to floating rate instruments . The duration of these instruments is linked to the interest rate reset period. The interest rate risk in a floating rate instrument or in a fixed rate instrument hedged with derivatives is likely to be lesser than that in an equivalent maturity fixed rate instrument. Under some market circumstances the volatility may be of an order greater than what may ordinarily be expected considering only its duration. Hence investors are recommended to consider the unadjusted portfolio maturity of the scheme as well and exercise adequate due diligence when deciding to make their investments.