A recent press report said that Bank managements have set aggressive goals for their branches to sell equity schemes with systematic investment plans (SIPs) that could restore the drooping riches of the mutual fund industry.
Reports said that SBI, the country’s largest lender has planned to sell 25 lakh SIP units this financial year ending March 31, 2012. Axis Bank, has also planned to sell 5 lakh SIP units and Canara Bank, has set a target of 2 lakh SIP units.
Reports also said that the total SIP folios of the mutual fund industry has grown to over 42 lakh accounts in March 2011 from 18 lakh in March 2009. Banks including Punjab National Bank and Union Bank, which partly own mutual funds, are also selling schemes through their extensive branch network.
Through the sale of schemes, the fee incomes including commissions from selling mutual funds and insurance of the banks are expected to boost up as the hike in interest rates have reduced the number of home loan and other loan borrowers. More over the lower credits off take of banks have threatened to affect revenues from their main operations.
Banks’ focus to sell mutual fund schemes will come as a huge relief to the asset management industry that has been reeling under the impact of a slew of regulations in the past two years.