Date:20/03/2004 URL: http://www.thehindubusinessline.com/2004/03/20/stories/2004032002540500.htm

Back Nationalised banks to be Reliance MF's distributors

Our Bureau

Mr V. Ananthakrishnan, Senior Vice-President, Reliance Mutual Fund, handing over the signed memorandum of understanding to Mr A. Krishnamoorthy, Chairman and CEO of Lakshmi Vilas Bank Ltd, at a function in Chennai. — Shaju John

Chennai , March 19

THE credibility commanded by old private sector banks and nationalised banks, particularly in small towns and villages, has made them Reliance Mutual Fund's preferred distribution outlets for its schemes.

The fund entered into a distribution agreement with the Karur-headquartered Lakshmi Vilas Bank on Thursday. On the occasion, Mr V. Ananthakrishnan, Senior Vice-President of Reliance Mutual, said they were in the process of negotiating tie-ups with a couple of other nationalised and old private sector banks.

Mr Ananthakrishnan said small towns and rural areas provided opportunities for mutual funds. Therefore, Reliance concentrated on ways that could help it raise money from these areas.

He felt old private sector banks such as Lakshmi Vilas had both credibility and a wide reach in the form of bank branches. The credibility meant that a bank's customers were relatively more open to investment suggestions.

Reliance had earlier tied up with Corporation Bank, which has a deep reach in Karnataka. Lakshmi Vilas has a wide network in Tamil Nadu and Andhra Pradesh.

Reliance's agreement with Lakshmi Vilas Bank does not prevent the bank from entering into a distribution tie up with other mutual funds. In this context, Mr Ananthakrishnan felt a mutual fund's performance held the key to attracting savings from towns.