In a bid to diversify operations, state-run Bank of India (BoI) plans to re-enter mutual fund business for which it is scouting for a foreign partner.
"We are looking for a partner to set up a mutual fund subsidiary," a senior official of Bank of India told PTI.
The bank is in talks with a few foreign players to set up a joint venture for the asset management business, the official said.
BoI would retain a majority stake in the asset management firm, the official said, adding that the shareholding pattern and other modalities would be looked into after a partner is decided.
It is to be noted that BoI had started its mutual fund business in 1990. Of the six schemes launched by the fund, four have been redeemed and two schemes were transferred to Tauras Mutual Fund after giving exit option to the investors in 2004.
Currently, there are seven mutual funds either fully or partly owned by banks, along with foreign partners. These include Baroda Pioneer Mutual Fund, Canara Robeco Mutual Fund, ICICI Prudential Mutual Fund, Principal Mutual Fund and SBI Mutual Fund, Axis Mutual Fund and IDBI Mutual Fund.
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Besides, Union Bank of India in partnership with KBC Group of Belgium has approached market regulator the Sebi for approval to set up asset management business.
The joint venture, in which Union Bank owns 51 per cent stake expects to start operations during the current fiscal.
Currently, there are 37 mutual fund players in the country with average asset under management (AAUM) more than Rs 7.68 lakh crore at the end of April.
Country's top three fund houses, Reliance Mutual Fund, HDFC Mutual Fund and ICICI Pru, together saw their assets surging by Rs 9,376 crore in April. HDFC Mutual Fund alone garnered Rs 5,923 crore and AAUM touched Rs 94,702 crore.
The third-largest fund house ICICI Pru saw its assets rising by Rs 2,046.66 crore to Rs 83,036 crore in April.