The fund plans to tap the massive network of its sponsor to distribute schemes. SBI has a huge network of 14,000 branches and we plan to grow mainly by tapping this. A formal tie-up will be done to distribute our mutual fund products. We will focus on those branches which have a strong retail customer base. The urban branches will also be used to sell schemes, Mr Prasad told FE.
Earlier, we were distributing a few schemes through some of the SBI branches. However, now we want to formalise it and focus on this to achieve growth, he said.
Besides, to build up its retail base to grow organically, the mutual fund may also look at acquisitions in future. Once we produce results in spreading our reach by distributing schemes through SBI branches, we may also look at acquisitions, Mr Prasad said.
The mutual fund has already tapped some of the State Bank of India subsidiaries like State Bank of Travancore and State Bank of Hyderabad, and distributed schemes through their branches.
The mutual fund has distributed schemes like Magnum Childrens Benefit Plan, Magnum Monthly Income Plan, Magnum Index Fund and Magnum Tax Gain through these branches. Last year, the fund was able to raise over Rs 33 crore through such efforts.
While admitting that bank employees lack of knowledge about mutual fund products may prove to be an impediment in its new initiative to grow, Mr Prasad said respective branch manager would be given training besides appointing a nodal officer in those branches where the products would be distributed.
He appeared to be bullish on the equity markets. Responding to a query on the war fears which wreaked havoc on the bourses, he said nobody wanted a war and Indian equity markets might see a rally.
SBI Mutual Funds head of fixed income, Mr Saravana Kumar said the calender year 2003 should see a softer interest rate regime and bond funds would remain attractive compared to bank deposits. The income schemes should give returns 150-200 basis points higher than bank deposits, Mr Kumar said.
SBI Mutual Fund manages schemes like Magnum FMCG Fund, Magnum Pharma Fund, Magnum Contra Fund, Magnum IT, Magnum Equity Fund, Magnum Balanced Fund, Magnum Multiplier Plus Scheme, Magnum Taxgain, Magnum Income Fund, Magnum Gilt Fund, Magnum InstaCash Fund, Magnum Monthly Income Plan, Magnum Index Fund and Magnum Childrens Benefit Plan.