Bharti AXA Investment Managers and Pramerica Asset Management Company are in talks with Bank of India (BoI) for selling their stake to the public sector lender.
Bank of India has decided to re-enter mutual fund business and is now scouting for a partner. Three companies including Bharti AXA Investment Managers, Pramerica Asset Management Company and a foreign firm have made presentation to the bank (BOI)recently, sources said.
The bank will do due diligence of these firms and would take a call, sources said, adding that the bank intended to have majority stake in the asset management firm. BoI had started its mutual fund business in 1990.
Of the six schemes launched by the fund, four have been redeemed and two schemes were transferred to Tauras Mutual Fund after giving exit option to the investors in 2004.
Currently, there are seven mutual funds either fully or partly owned by banks along with foreign partners. These include Baroda Pioneer Mutual Fund, Canara Robeco Mutual Fund, ICICI Prudential Mutual Fund, Principal Mutual Fund and SBI Mutual Fund, Axis Mutual Fund and IDBI Mutual Fund.
Besides, Union Bank of India in partnership with KBC Group of Belgium has approached the market regulator SEBI for approval to set up asset management business.
The joint venture, in which Union Bank owns 51 per cent stake expects to start operations during the current fiscal.
Currently, there are 39 mutual fund players in the country with average asset under management (AAUM) more than Rs 7,13,280 crore in September.
Meanwhile, the board of Bank of India has approved raising up to Rs 10,286 crore through Tier-I and Tier-II capital. The capital would be raised through issuance of equity shares, innovative perpetual debt instruments, preference shares, Tier II bonds and upper Tier II Capital Bonds.