Yes Bank, the fifth largest private sector bank, has got the approval from the Reserve Bank of India (RBI) to set up mutual fund business in India. The bank will sponsor mutual funds and will have a wholly owned asset management company (AMC) and trustee company. The development follows on the heels with the bank’s announcement in January to enter the mutual fund business.
However, the bank has yet to get the approval from the capital market regulator, the securities and exchange board of India (SEBI).
This move will complement the bank in its retail liabilities strategy and allow the AMC to leverage the bank’s wide branch network to acquire customers. According to the data available on Association of Mutual Funds in India’s site, there are currently 44 mutual fund player in India. Yes Bank, on receiving the approval from SEBI, will increase the count to 45. There are already five banks—ICICI Bank, Axis Bank, HDFC Bank, Kotak Mahindra Bank and State Bank of India — that are active in the mutual fund business.
Yes Bank started its operations in 2004. Last month only it announced the plan of launching credit card business. It appointed former HDFC Bank executive, Rajanish Prabhu to lead the credit card division.