The Hindu Business Line : Federal Bank to distribute Franklin Templeton MFs

FRANKLIN Templeton Investments (India), one of the largest mutual funds in the country, today announced a tie-up with Federal Bank to distribute its products through the bank's branches.

A memorandum of understanding was signed between the President of Franklin Templeton India, Mr Ravi Mehrotra, and the Chairman and CEO of Federal Bank, Mr M. Venugopalan, here today.

According to Mr Mehrotra, the tie-up with Federal Bank would lead to the generation of a few thousand crore worth of mutual fund assets over the next 2-3 years.

Mr Venugopalan said though bankers were earlier apprehensive about a possible cannibalisation of their deposits by mutual funds, now they have realised that offering more products would only enhance the bond between banks and customers.

"There is lot of awareness among people (about mutual funds). We only need to inform them about the nitty-gritty of such investment options," he said.

Federal Bank will initially distribute Franklin Templeton products through its 40-50 select branches, before expanding the service to all branches.

The fall in bank deposit rates is driving more people to try other investment options such as mutual funds.

Mr Mehrotra said Kerala was one of the fastest growing markets for his company, which manages Rs 17,000 crore worth assets in India.

To go easy on acquisitions

KOCHI: Federal Bank, which called off last month its plans to acquire Lord Krishna Bank (LKB), has put its acquisition strategy on the backburner for the time being, Mr Venugopalan said.

"We have to find a bank with the right size. We can bite only what we can chew," he said on the sidelines of the press conference.

He said LKB fitted into Federal Bank's plans because of its size and presence outside Kerala, especially in the North. However, the plan was abandoned after both the banks failed to reach a mutually agreeable valuation.

"There is no bank in our radar now," he said.

On the proposal to issue global depository receipts , Mr Venugopalan said the issue would happen before the end of the current fiscal. The festival season in December has forced the bank not to go ahead with the issue during the month, he added.

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