Mumbai: State-run Union Bank of India expects to launch its mutual fund business by January next year and is currently working on the shareholders agreement for its proposed joint venture with Belgium-based partner KBC Asset Management NV, a top bank official said.
Union Bank entered into an agreement with KBC in July this year. It will hold 51% stake in the JV while the balance will be with the Belgium-based firm. The JV will have an initial capital of Rs100-150 crore.
“We are currently working on the shareholders agreement. The idea is to launch the business by January,” Union Bank’s General Manager, Planning and Development, B L Javeri told PTI here.
Though Union Bank had agreed to hold a majority 51% stake in the JV, the bank might increase its holding in the future, Javeri said.
“As of now, we will have 51% stake in the JV. It may even go up,” he said.
“While KBC’s huge global experience in the mutual funds business will benefit the new venture, the lender is also looking at shaping up its own business model, which includes the bancassurance and agency models,” Javeri said.
KBC, which is making its entry into the domestic market through this JV, is one of the largest MF players in Belgium. The company has assets under management worth Euro 174 billion as on end-2007.