IDBI Bank will set up a mutual fund subsidiary with IDBI Capital markets, its wholly-owned subsidiary, once its proposed life insurance venture gets off the ground. | |
| The bank will have a 65 per cent stake in the asset management company (AMC) with IDBI Capital holding the remaining share, according to a senior IDBI official. |
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| The bank's application for setting-up the AMC business is already with the Reserve Bank of India (RBI). The central bank, however, has asked the public sector bank to focus on getting the insurance business off the ground before taking up new businesses. |
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| The bank is seeking approval from the Insurance Regulatory and Development Authority (Irda) for its life insurance joint venture, in which it will hold a 48 per cent stake. Financial services |
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| group Fortis and Federal Bank will hold a 26 per cent stake each. |
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| VP Shetty, chairman and managing director, IDBI Bank, said," After we complete the task in hand by September, we will take it (the AMC proposal) up with the RBI." |
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| This would mark IDBI's re-entry into the mutual fund business after it exited its joint mutual fund venture with Principal Financial Services in 2003. |
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| The bank is also waiting for regulatory clearance from the central bank for setting up a private equity arm. |
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| The public sector bank is planning to raise $1.5 billion through a medium term note (MTN) issue. |
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| The first tranche is likely to be issued overseas within three months after the opening of the bank's overseas offices in Singapore and Bahrain. |
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| "We will enter the market at the appropriate time. However, we would like to enter the market within the next three months," said Shetty. HSBC and Barclays have been appointed as arrangers for the issue. |
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| The bank is targeting a deposits growth of 25 per cent and advances growth of 18-20 per cent. |
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| "There has been a slight slowdown on a quarter-on-quarter basis in credit growth. We are not that aggressive in retail advances. We are going totally slow on acquiring new real estate advances," said Shetty. |
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| IDBI Gilts, the bank's wholly owned primary dealer (PD) subsidiary with net-owned funds of Rs 100 crore, expects to build a trading portfolio of Rs 400 crore in the initial phase and raise it to Rs 1,000 crore end of March 2008. |
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| The primary dealership business earlier had a government securities of about Rs 700 crore when it was part of IDBI Capital Market Services. |
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