RBI recently allowed IndusInd Bank to establish a wholly owned Asset Management Company (AMC), marking a significant shift in India's banking landscape.
With this license, IndusInd Bank can now manufacture mutual funds, expanding its revenue streams beyond just distribution.
MD Sumant Kathpalia had earlier hinted at expanding into asset management, non-life insurance, and broking, showcasing IndusInd’s forward-thinking strategy.
IndusInd’s promoter recently acquired a 60% stake in Invesco Asset Management India, boosting its ambitions in the asset management space.
In FY24, IndusInd Bank earned Rs 50 crore from mutual fund distribution, trailing behind ICICI Bank’s Rs 540 crore, indicating room for growth.
RBI’s approval for IndusInd might set a new precedent, inspiring other banks to explore para-banking subsidiaries to boost their profitability.
Experts are watching to see if RBI will further relax rules for banks to venture into other para-banking businesses like insurance, broking, and wealth management.