Axis Bank (formerly UTI Bank) has obtained the Reserve Bank's permission to get into the mutual fund business, according to agency and newspaper reports. Permission from the market regulator, SEBI, is now under process.
The move is interesting as Axis Bank is one of the descendants of the erstwhile Unit Trust of India. Among others, the bank's funds will be competing for investor's attention with those run by UTI Mutual Fund, which is the inheritor of the Unit Trust's mutual fund business. The new Asset Management Company (AMC) will be wholly-owned by the bank.
The number of players in India's fund industry is in rapid expansion. If all the applications lined up with SEBI fructify, then the number of AMCs will soon shoot up from the current 33 to over 50.
Recent greenfield entrants include JP Morgan, AIG and Mirae. Additionally, IDFC has acquired Standard Chartered's fund business while Robeco has taken a stake in Canbank Mutual Fund.