YES Bank Ltd has received Reserve Bank of India approval to start a mutual fund, becoming the latest to join an already-crowded industry.
India’s fifth-largest private-sector lender said in a stock market filing on Monday that it has got RBI nod to sponsor a mutual fund as well as set up an asset management company (AMC) and a trustee company. The bank had in January said that it planned to set up an AMC.
The bank will now seek approval from the capital markets regulator Securities and Exchange Board of India for the mutual fund.
The new business will complement its retail liabilities strategy, strengthen multi-product customer engagement and allow it to leverage its distribution network to acquire customers, it said.
India's mutual fund industry has 44 players, according to the Association of Mutual Funds in India. YES Bank's bigger private-sector rivals – ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank – as well as State Bank of India, the nation's largest lender, and a number of foreign companies are among those that have a mutual fund business.
The nod for the mutual fund comes after YES Bank last month announced plans to launch a credit card business. The lender has appointed former HDFC Bank executive Rajanish Prabhu to lead the division.
YES Bank was started in 2004 by Rana Kapoor and his late partner Ashok Kapur along with Rabobank International.
Shares of YES Bank were up 0.86 per cent at Rs 731.45 each in morning trade on Monday in a flat Mumbai market.