Bank sponsored MFs take help of affiliates to tap customers

Rs 143 crore commission paid to group affiliates

Mumbai: It is no surprise that affiliates of fund houses tend to promote products of group AMCs. This is borne out to the commission payouts to affiliates. India’s largest fund house - HDFC Mutual Fund has paid Rs. 41 crore as commission – the highest among its distributors to HDFC Bank in FY10-11.

Similarly SBI Mutual Fund has paid the highest commission of Rs. 35 crore to SBI Bank and Axis AMC has paid the highest commission of Rs. 14 crore to Axis Bank. Birla Sun Life Mutual Fund has doled out Rs. 11 crore to Aditya Birla Money Mart.  ICICI AMC has paid more HSBC Bank (Rs. 15 crore) and Citibank (Rs 14 crore) than ICICI Bank (10 crore). Kotak Mutual Fund coughed up Rs. 7 crore to Kotak Mahindra Bank.

Bank sponsored mutual funds leverage the vast network of their banks’ extensive branch network. Axis Bank has 1400 branches across the country.

A majority of these private banks have also opted in for transaction charges. “Banks are expanding the reach of mutual funds. We are doing KYC for our customers. You don’t need to sell 20 different funds to qualify as a good distributor. Banks are bringing new customers into MF industry,” says Karan Datta, National Sales Head, Axis Mutual Fund.