J&K Bank To Set Up MF, Scouts For Partner

Mumbai, October 21: | Updated: Oct 22 2002, 05:30am hrs
Jammu & Kashmir Bank (JKB) has decided to float a mutual fund (MF) subsidiary, and is in the process of identifying a foreign strategic partner for the new venture.

We have taken an in-principle decision that we are going to get into the MF business and are currently looking for a strategic partner for the same, JKBs chairman, MY Khan told FE.

The proposed move is a part of the banks effort to increase its fee income.

The bank already has a life insurance joint venture with Met Life Insurance which has signed a memorandum of understanding with Karnataka Bank for distributing its products through the latters network.

The tie-up is a non-exclusive one. Similarly, the bank distributes general insurance products for Bajaj Allianz.

We are diversifying into new areas, and are also expanding into the rest of the country as well, said Mr Khan.

The new initiatives taken by the bank in the current fiscal include entry into broking business with Infrastructure Leasing and Finance Services (IL&FS).

It has begun operations in Jammu, Srinagar and Delhi and will shortly expand to other places as well to a total of 50 locations.

The bank is also into life and general insurance distribution, housing loans under which it has disbursed nearly Rs 170 crore in the last six months.

It has also tied up with Bharat Sanchar Nigam Ltd for routing all tariff collected in Jammu and Kashmir through the bank.

The bank had earlier stated that it is ready to offload 8-10 per cent of its equity capital at the right price to a strategic partner.

We are in talks with a lot of players, but nothing has been finalised. We are waiting for the correct price at to be offered to us. We are not in need of funds hence we are not willing to sell cheap. What we are looking for is a good brand name and a strong strategic partner. said Mr Khan.

He had earlier stated that he is willing to sell a stake in the bank only upwards of Rs 200 per share.