Speaking at a press conference here today, Mr Vivek Reddy, Chief Executive Officer, Kothari Pioneer, said, "Mutual funds as an investment alternative have been growing in popularity over the last few years and banks are an obvious choice as a distribution channel. In fact, in the United States, banks are an important element in the distribution of mutual funds, accounting 16 per cent of the total sales of mutual funds."

Mr KR Maheshwari, Managing Director, IndusInd Bank said: "The shift towards retail banking has led us to distribution of mutual funds. We plan to increase our branches from 33 to 50 by March 2001, and will be focussing on mutual funds in a big way." At present, the bank is distributing schemes of Dundee Mutual Fund.

Mr Maheshwari said that financial services in the country is undergoing a revolution. And by and large bankers, have realised that their paramount duty is to satisfy all the needs of an investor. "The idea is to make IndusInd bank a one-stop shop for all types of financial products, including mutual funds. The bank will also be marketing Kothari Pioneer schemes through the Internet," he added.

The bank, which already is a depository participant, also intends to distribute insurance products and enter into travel business.

Mr Reddy said that in terms of reach, safety perception, service standards and established institution, mutual funds are striving to be like banks, while banks are trying to offer diverse products for reducing their costs.