Tie-up with Franklin Templeton Mutual Fund
KolkataFeb. 13United Bank of India (UBI) is looking at providing online stock broking services to customers in association with a leading broking firm.
The bank, which hopes to expand its suite of capital market-related services, is in talks with few well-known brokers, includingIDBI Capital Markets and Sharekhan.
UBI, said Mr P.K. Gupta, CMD, plans to choose its broking partner carefully, keeping in mind the needs of its clients as well as the broker's track record and credibility.
Both IDBI Cap and Sharekhan have expanded their operations in recent times, foraying into newer business segments. Both provide Internet-based services.
UBI, which intends to offer its clients a modern online trading environment, will also provide demat services, thanks to an arrangement being worked out with CDSL, the depository. Further, it hopes to become a service provider for investors in mutual funds who require MIN, the identification number mandatory for investments above Rs 50,000.
The bank aims to tap retail customers, many of whom are planning to move away from traditional investment options to contemporary products like mutual funds. The aim is also to increase its non-interest income, an objective that all bankers are pursuing at the moment.
A number of leading public sector banks have already entered into tie-ups with brokers. These include Oriental Bank of Commerce and Bank of India. Each of these tie-ups is aimed at leveraging the broking partner's experience in the capital market.
Mumbai Bureau reports:Franklin Templeton has signed a memorandum of understanding with UBI for distribution of its products.
"We are confident that the distribution of mutual fund products will make a significant contribution to our fee income in the coming years," said Mr P.K. Gupta, CMD of UBI.
"We have always believed that reaching out to a larger number of retail investors is the way forward for the Indian mutual fund industry to attain the critical mass necessary for growth. A very small proportion of the household savings in India are invested in mutual funds, providing us with opportunities to grow this business. This alliance will help us to reach out to retail investors who hitherto did not have access to our investment products," said Mr Vivek Kudva, President, Franklin Templeton India.