Financial Daily from THE HINDU group of publications
Thursday, Oct 14, 2004
Financial Daily from THE HINDU group of publications Thursday, Oct 14, 2004 |
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Money & Banking
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Public Sector Banks Markets - Mutual Funds Andhra Bank to vend Tata MF products Our Bureau
Mr T.S. Narayanasami (left), Chairman and Managing Director, Andhra Bank, and Mr Ved Prakash Chaturvedi, CEO, Tata Asset Management Pvt. Ltd, are exchanging documents after signing an MoU on Wednesday in Hyderabad. - - A. Roy Chowdhury
Hyderabad , Oct. 13 TO increase the level of non-fund base income stream to counter the falling interest rate regime, Andhra Bank has entered into an alliance for third party distribution of products with Tata Asset Management, which manages the Tata Mutual Funds. Announcing this here on Wednesday, the Andhra Bank Chairman and Managing Director, Mr T.S. Narayanasami, told newspersons that the bank has set an ambitious target of selling mutual fund products worth Rs 500 crore during current fiscal. The bank, which tied up with Principal Mutual Fund and SBI Mutual Fund recently, sold over 8,900 mutual fund products worth over Rs 48 crore in just over a month. According to Mr Narayanasami, the bank plans to achieve Rs 50 crore turnover from selling the products of Tata Mutual Fund alone in the second half of current fiscal. As falling returns on conventional savings were pushing retail investors towards instruments such as mutual funds, the Andhra Bank CMD said the bank accordingly decided to leverage its distribution strengths and began the process of forging alliances with financial services and products companies for third party distribution of products. The Andhra Bank Executive Director, Mr R. Balakrishnan, said in view of the emerging opportunities in the fee-based income stream, the bank is training its officers and staff for selling the products of Mutual Fund and Insurance companies. In less than two months time, 242 officers of the bank obtained the AMFI certification, while 236 officers were successfully certified by the Insurance Regulatory and Development Authority (IRDA), he said. Speaking to Business Line on the sidelines of the meeting, Mr Narayanasami said the bank has set an internal target of 25 per cent growth in interest income and has chalked out ambitious targets for non-interest income streams. "The target is to meet all the administrative expenses through the profits of fee-based income. This can be achieved only when the non-interest income contributes to 65-70 per cent of total business. At present, our non-fund based income is in the range of around 35 per cent," he said. The bank expects to finalise the new strategies for its 16 financial services centres in various zones across the country, aimed at making them centres of profit before the month-end, Mr Narayanasami said. The Tata AMC Chief Executive Officer, Mr Ved Prakash Chaturvedi, said the company has set a target of achieving at least 100 per cent growth in assets under management (AUM) to Rs 8,000 crore by the current fiscal-end.
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