IOB plans capital market subsidiary

As part of its strategy to increase income from non-core businesses, Indian Overseas Bank (IOB) is likely to float a capital market subsidiary next year.

The IOB board has already approved the proposal for a capital market subsidiary, but the bank is presently going slow on the project.

T S Narayanasami, chairman and managing director, IOB, said that the bank would again take up the issue of capital market subsidiary in the next fiscal after structuring its direct fee-based business.

He was in Kolkata for signing a memorandum of understanding with Tata Mutual Fund for the distribution of latter's products.

The bank has already tied up with six mutual fund houses for distribution of their products.

Narayanasami informed that capital market subsidiary is definitely on the agenda, but the bank would consider it in the second phase, as now IOB is laying thrust on direct fee-based income like distribution of mutual fund and insurance products.

"Direct fee-based income will have impact on the bank's bottomline immediately. In case of subsidiary, we have to depend on dividends. So, we have decided to first streamline the direct fee-based income," he said.