IndusInd Bank gets RBI Approval to Start Mutual Fund Business through New Subsidiary
IndusInd Bank announced that the Reserve Bank of India (RBI) has granted approval for the bank to set up new subsidiary dedicated to mutual fund business. This step allows banks to venture into asset management through newly formed units.
In an official statement, the bank revealed it will fully own this subsidiary. It will handle mutual fund management. Additionally, IndusInd Bank plans to inject equity capital into the new entity. RBI communicated its approval to the bank through a letter on the same day.
Despite this positive news, IndusInd Bank’s shares closed 1.30% lower on BSE settling at Rs.1,347.70 per share.
The new asset management company (AMC) will supervise mutual fund operations and receive an equity infusion from the bank. Previously, IndusInd Bank sold mutual fund products on a limited basis.
The bank earned only Rs.50 crore from mutual fund and portfolio management services in FY 2024, a fraction of what Kotak Mahindra, ICICI Bank, and Axis Bank received from similar activities, that was Rs.280 crore, Rs.540 crore and Rs.540 crore, respectively.
Earlier in the year, IndusInd International Holdings Limited (IIHL), an investment company based in Mauritius with a diverse portfolio in banking and financial services announced a significant move. IIHL entered into a joint venture with Invesco Ltd. It agreed to acquire a 60% stake in Invesco Asset Management India Limited. This collaboration highlights IndusInd Bank’s expanding footprint in the financial services sector.
