SBI MF in talks with Middle East banks

CHENNAI: After being appointed as the fund manager for postal and rural life entities, state-run SBI Mutual Fund is now in talks with some banks in the Middle-East for tie-ups to sell its products.

"We are in talks with some Middle-East banks to sell our products. By the end of this financial year, we would finalise at least two tie-ups and the first one is likely to finalised by next week," SBI Mutual Fund Managing Director and Chief Executive Officer Syed Shahabuddin told media.

However, he refused to divulge the names of the banks. "Our offshore fund is mainly dollar and euro denominated, which will have a lot of appeal to foreigners because the investments are made in India and the returns commensurate with the Indian stock market," he added.

Sounding bullish on the domestic market, Shahabuddin said the company's assets under management (ASM) would touch Rs 40,000 crore from Rs 28,000 crore by end of this year.

SBI MF would also target tier II and tier III cities to fuel its growth. "Our business from these places are just about 30 per cent and 70 per cent mainly comes from the urban areas. We would like it to be at least 50:50," Shahabuddin said.

Commenting on the potential of MFs, he said there was generic feeling among the investors about SIPs (Systematic Investment Plans). "SIPs have been increasing of late."

"Over the past three years, Mutual Funds have grown at an average CAGR of 40-45 per cent. This year it has again grown by about 45 per cent. This is mainly because of the boom in the Sensex," he said