IndusInd Bank on August 19 said that the Reserve Bank of India on August 19 accorded approval to the lender to set up unit to undertake asset management business of mutual fund.
In a regulatory filing, the lender said that a wholly owned subsidiary will undertake asset management business of Mutual Fund along with infusing equity capital in the said asset management subsidiary.
The banking regulator intimated IndusInd Bank about the development via a letter earlier today.
Meanwhile, shares of IndusInd Bank closed 1.30 percent lower at Rs 1,347.70 apiece on BSE on August 19.
The new asset management company (AMC) will handle mutual fund operations and benefit from an equity infusion by the bank. Previously, IndusInd Bank distributed mutual fund products but without significant scale.
In FY24, the bank earned just Rs 50 crore from mutual fund and portfolio management services, a fraction compared to Kotak Mahindra, ICICI Bank, and Axis Bank, which generated Rs 280 crore, Rs 540 crore, and Rs 540 crore respectively from similar activities.
Earlier this year, IndusInd International Holdings Limited, a Mauritius based Investment Holding Company with several investments in banking and financial assets, and Invesco Ltd. announced that had that they have entered into a definitive agreement to form a joint venture, and IIHL to acquire a 60 percent stake in Invesco Asset Management India Limited.
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