Mumbai: Franklin Templeton Investments (India), has signed a memorandum of understanding with premiere private sector bank Karnataka Bank, for the distribution of its products. Under the agreement, Karnataka Bank (deposits: Rs13,243 crore as on 31 March, 2006, and advances: Rs7,791 crore) will distribute the entire range of Franklin Templeton funds through its branches across the country.
Speaking on the occasion, Ananthakrishna, chairman and CEO of Karnataka Bank said, "Mutual Funds are rapidly gaining ground among retail investors due to the advantages of professional management, risk diversification, improved liquidity and tax efficiency. The signing of this distribution alliance with Franklin Templeton Investments - one of India's leading fund houses - is in keeping with our objective of becoming a single-point financial supermarket, by offering a range of financial solutions under one roof. For us, this tie-up will open up further opportunities to provide our vast client base with a wider choice of products to meet their diverse financial needs and also give a boost to our fee-based income. We expect a substantial revenue contribution during the current year from the sale of mutual fund products."
Vivek Kudva, President, Franklin Templeton India, said, "Given that mutual funds still constitute a minor portion of the household savings pie in India, we believe that future growth will depend upon the ability of asset management companies to garner a higher share of retail savings. The challenge facing the industry is how to expand the distribution network to semi-urban and rural areas where many small investors live, in a cost effective manner. Leading private sector banks such as Karnataka Bank, with their extensive branch networks, can help us reach out to retail investors who currently do not have access to our products."