"IBA has once again requested the Centre for a one per cent reduction in the savings bank rate by at least one percentage point," Union Bank of India CMD V Leeladhar told presspersons after signing an agreement with DSP Merrill Lynch Mutual Fund for distribution of their products on Monday. Mr Leeladhar is also the vice-chairman of IBA.
Though he was not ready to say that the downward trend in deposit rates would continue, Mr Leeladhar responded to a query only to say: "Union Bank will not change the rates for a few days". Mr Leeladhar said the bank has decided to distribute DSPML Mutual Funds products, eight in all, as part of a strategy to increase fee-based income and offer the banks clients a bouquet of products. He said, "In additon to bank deposits, clients look for alternative investment opportunities which are safe, liquid, offer good returns, tax-effective and provide capital appreciation. Mutual funds have products which help investors meet these objectives."
DSPML Mutual Fund chairman Hemendra Kothari said, "MFs are becoming a preferred option for investors and we are planning to reach more clients through banks."