Shinsei Bank to float AMC

The Tokyo-based Shinsei Bank is all set to foray into the Indian mutual fund business by forming a joint venture asset management company (AMC) with Andhra Bank.

If the deal goes through, Shinsei becomes the second Japanese financial services company to enter into the AMC business in India. Last week, Nikko Asset Management Company tied up with Ambit RSM for the AMC business.

It is learnt that Shinsei will take a majority stake in the proposed AMC. According to sources, the tie-up with Andhra Bank will help the Japanese major to tap the distribution network of the South-based nationalised bank.

When contacted, Piyush Surana, Chief Operating Officer, Shinsei Corporate Advisory Services, refused to confirm the development.

He, however, said: "We will be tying up with an Indian institution for AMC. We will be holding the majority stake."

The proposed entry of Shinsei Bank in AMC business comes at a time when other players including Japan's Mitsui, Korea's Mirae Asset, UBS, Aviva and Pioneer among others are planning to enter the domestic mutual fund business.

Recently, Shinsei Bank also announced a tie-up with top fund house UTI Mutual Fund to manage $300 million, raised from Japanese investors, in the Indian equity market

"The tie-up with Andhra bank will help Shinsei Bank to tap into its distribution network as it is a premier nationalised bank,"said a source close to the developments.

Explaining the rationale of more overseas fund houses entering domestic market, Chairman of the Association of Mutual Funds in India (AMFI) AP Kurien said: "If a foreign company wants to set up a 100 per cent ownership of AMC business in India, it has to invest $50 million under the FDI norms.