Franklin Templeton, State Bank of Patiala tie-up to expand network

New Delhi, Sept 8 (UNI) Franklin Templeton Investments, India's leading fund house, today tied-up with the State Bank of Patiala, for expanding its distribution network, and said it is also scouting opportunities for agreements with other financial institutions.

''The Mutual Fund market is an under-penetrated market right now with less than 10 per cent of Indians investing in it and there is a lot of scope in this area which we aim to leverage. The State Bank of Patiala with their wide branch network and large customer base will help us achieve our goal of becoming a household name in India,'' Franklin Templeton India President Vivek Kudva told reporters here.

Under the MoU, the State Bank of Patiala will get a 2.25 per cent commission based on volume, for every Franklin Templeton transaction and product it sells.

Franklin Templeton has tied up with other banking institutions in the past like UCO Bank, Corporation Bank, South India Banks, etc, and is looking at further such alliances to expand its reach in the mutual fund section across India.

''We are looking at other opportunities with banks that have strong IT systems and a strong investment business,'' Mr Kudva said.

Franklin Templeton is also the first Mutual Fund to put in an offer document with market regulator Securities Exchange Board of India (SEBI) for a new mutual fund ofering.

''We are awaiting approval from SEBI. The fund is not a capital guaranteed fund, but one with both fixed income and equity investments,'' Mr Kudva said.

There is a huge domestic demand for mutual funds with the per capita income rising by 20-25 per cent, State Bank of Patiala CGM Ashok Mukand said, and added that the bank's non-fee income in cross selling last year was Rs 6.5 crore, which it is aiming to increase to Rs 12 crore by March, 2007.

The State Bank of Patiala, which currently has 763 branches and 450 ATMs across India, is planning to set up an additional 20 branches and 150 ATMs by March, 2007, in its core locations including Punjab, Haryana, Himachal Pradesh, Chandigarh and Delhi.

The bank's net profit last year was Rs 303 crore while its turnover stood at around Rs 55,000 crore, of which Rs 33,000 is deposits while the remaining Rs 22,000 crore turnover was from advances. Its non-interest revenue last year was Rs 350 crore.

To a poser on the market share and growth plans, Mr Kudva said the company would like to grow at the industry rate, which recorded a 60 per cent growth last year. ''In the last four months, we registered a growth of 5 per cent at Rs 18,000 to Rs 25,500 crore.

Presently we have a 8 per cent market share and would like to retain that figure.'' In 2005, the asset management industry grew by 35 per cent and the State Bank of Patialia is aiming for assets under management under a ''few thousand crores in the next four years.'' UNI RA CS PC1741