Public sector player Bank of India (BoI) is in talks with Credit Agricole, a French bank, and BBVA, the Spanish financial services group, to set up an asset management company (AMC) for its foray into the mutual funds business.
Sources close to the development said that the bank is likely to finalise a partner over the next two-three weeks. A bank executive said that Dai-ichi, which is one of the partners for Bank of India’s life insurance venture, is no longer on the radar.
The Mumbai-headquartered bank recently received an approval from Insurance Regulatory and Development Authority to set up a life insurance venture. It has tied up with Union Bank of India and Dai-ichi of Japan as Star- Unio Dai-ichi Life Insurance (SUD Life). Bank of India holds a 51 per cent stake in the venture, while Union Bank of India has 23 per cent and Dai-ichi the remaining 26 per cent. The company is expected to launch its first product by the end of the month.
In recent years, a host of public sector banks ranging from Union Bank of India, Bank of Baroda and Canara Bank have tied up with foreign partners for mutual funds. Union Bank and Bank of Baroda have started on a clean slate, while Canara Bank merely inducted a foreign partner.
Earlier, BBVA was in talks with Union Bank of India to form an AMC but the public sector bank tied up with Belgian player KBC group and started operations last year.
Credit Agricole group is the second largest French bank and is looking for a strategic partner to enter asset management, private banking and consumer finance in India.
Bank of India had a mutual funds venture but exited the business at the start of the decade. To step up fee-based income and offer a complete range of financial products, the bank has decided to reenter the mutual fund space.
