Union Bank to enter MF business by Dec

State-run Union Bank of India, in joint venture with Belgium-based company, plans to enter the mutual funds business by December this year and hopes to receive the market regulator Sebi's approval to set up the firm by June 30, a top bank official said.

"The bank expects to receive the Sebi nod for JV by December. We would be able to enter the market with our first product by December this year," Union Bank General Manager Personal Banking & Operations S Govindan told PTI here.

The state-owned lender has entered into an agreement with Belgium-based KBC Group for the mutual funds JV in November last year. According to the intial agreement, Union Bank will hold a majority 51 per cent stake in the company while the rest will be with KBC Group.

Union Bank plans to invest Rs 48.07 crore in the JV by December while KBC will contribute Rs 64.93-crore, Govindan said.

The bank plans to change its 200 branches as dedicated centres for the mutual fund operations. However, the bank's entire branch strength will be used as selling points, Govindan said.

"There is always a scope for innovation in the mutual fund industry. Shaping our products according to the customer needs will be the key strategy," Govindan said.

The JV had received Reserve Bank's clearance early this year.

Union Bank has around 2,600 branches at present, and hopes to open 500 more branches in the current fiscal year, Govindan said.