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Friday, August 07, 2009

Fund houses hope to sell schemes via post offices

Though India Post has decided to temporarily suspend selling mutual fund products for lack of clarity on commission, fund houses are hoping that the issue would be resolved soon. India Post has stopped selling MF schemes since the ban on the entry load came in to effect since August 1, 2009.

Given the widespread reach of the post office in rural areas, small towns and cities, its decision to stop selling MF products have given a blow to the aim of achieving inclusive growth. However, the department is not a major player in the distribution business and has generated fund schemes worth Rs 150 crore, said an official.

The department having 250 locations for selling mutual funds and 1.55 lakh offices, is seen to be an potential opportunity by fund houses. "The reach of post offices is incomparable and unparalleled. I am sure it is just a temporary decision and hope that they would resume services once clarity emerges in the industry," said Sundeep Sikka, Reliance Mutual Fund CEO. Reliance Mutual Fund is India's leading asset management company, the schemes of which are sold via designated post offices.

source: Indian Express Finance

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