The Hindu Business Line : Union Bank shortlists partners for MF biz

Mumbai, Dec. 27 Union Bank of India has short-listed Spain-based BBVA and Belgium-based KBC as potential partners for its mutual fund business, said Mr R.S. Reddy, Executive Director of the bank.

Mr Reddy said that the bank has appointed three consultants to study the deal. “We have appointed Ernst & Young, DSP Merrill Lynch, and KPMG to look into the matter and based on their suggestions we would be finalising the deal in the next 10-15 days,” he said. Mr Reddy was speaking at the launch of the bank’s SMS banking service here on Thursday.

Once selected, the company would develop both mutual fund and retail products, which would be sold by the bank using its branch network. “Going ahead, these are the products which will attract people more than the plain vanilla products,” said Mr Reddy.

SMS banking

The SMS banking service will enable customers get information regarding an account balance, a mini statement (record of the last few transactions conducted), and lets them place a chequebook request. Customers will also be updated on interest rate changes and new products from the bank.

The bank will charge the customers an annual amount of about Rs 130 for the services. “We will look at enabling mobile-based payments, collection, and other such related services in another three-to-four months,” said Mr M.V. Nair, Chairman and Managing Director.

Core banking

The bank plans to bring all its 2,278 branches under the core-banking platform by March 2008. Mr Nair said that some branches of the bank located in remote rural areas might pose a bigger challenge. “Connectivity is a huge issue in these regions, but we are in talks with BSNL and are hopeful of tiding over the problem,” said Mr Nair.

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