TATA Mutual Fund ties up with South Indian Bank

Kochi, Jun 25 (UNI) TATA Mutual Fund today signed a strategic tie-up agreement with the Thrissur-based South Indian Bank for the distribution of all its fund schemes across the bank's 450-odd branches in the country.

Talking to reporters after signing the agreement here, Tata Asset Management Ltd. Chief Executive Officer Ved Prakash Chaturvedi said this was the first time that Tata Mutual Fund was tying up with a bank in Kerala for the distribution of its products.

''This initiative will add value to TATA MF's network and complement its growth strategy,'' he added.

Mr Chaturvedi said that Tata Asset Management Ltd. presently has more than Rs 12,000 crore assets under management of one million investors. ''We hope to make it ten million investors in another three to five years,'' he added.

The fund was currently present in 70 cities in the country and the aim was to extend it to 500 cities in the near future, Mr Chaturvedi said.

Chairman and CEO, South Indian Bank Ltd;, V A Joseph said the bank had initially identified 200 branches across the country to offer mutual fund products to the investors.

The bank, which had earned Rs three crore through sale of mutual funds and allied products last year, was hoping to increase the income from this source to Rs ten crore this year.

The bank was also planning to start online broking services in the next two to three months, he added.

On the recent volatility in the equity market, Mr Chaturvedi said that for long-term investments, the stock market provided a good opportunity of returns compared to other savings and investment instruments.

The BSE sensex had zoomed from 1000 points 15 years ago to 12,000 this year. With the economy growing at the projected rate of six to seven per cent, the stock markets should also grow, he added.

The two major TATA Mutual Fund schemes, the 'pure equity fund' and the 'tax saving fund' had seen average returns of 34 per cent and 28 per cent per annum during the past ten years, he said.

On the potential of the synergy between banks and mutual funds, Mr Chaturvedi said that while in the US, the mutual fund and banking sectors were almost on par, in India, the banking sector was ten times bigger than the mutual fund industry, which was presently Rs 200,000 crore. There is a lot of potential for the mutual fund sector to grow in collaboration with banks, he added.

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