But why mutual funds? Replies Ujwal Thakar, executive vice-president, TimesBank: ``Mutual funds is a big industry globally (in the US, mutual funds manage funds that are greater than what the banking industry does). As a retail bank, TimesBank believes in offering to its customers various investment choices.''

With the advent of this new concept of banks selling mutual funds, bank customers will now find investing in mutual funds as simple as going to the bank, adds Thakar. ``With last year's budget concessions, investors can plan their wealth in a way that optimises returns, liquidity and tax benefits. It also helps the bank to earn a fee income,'' he adds.

Meanwhile, the bank is testing its MF distribution skills with DSP's open-ended fund, called the Balanced Fund. The scheme will be open for subscription for another couple of days. Thakar says that in theBalanced Fund, DSP has combined the strategy of growth and income schemes. The Balanced Fund invests 50-70 per cent in equity (like a growth fund), and 30-50 per cent in debt (like an income fund), Thakar adds.

On access to the fund, Thakar says that although the fund is an all-India launch for DSP Merrill Lynch, at the moment, TimesBank is actively selling it in Mumbai.

On the whole, it's a win-win situation in which everyone benefits. Customers have better access when banks sell unconventional products such as mutual funds. Also, while all mutual fund schemes carry market risks, when a bank offers a scheme, it takes care to choose those that are managed by professional managers with a good track record, says Thakar. The issuer of the fund benefits by reaching the customers of the bank that is distributing the product through its vast retail network. And the bank, of course, earns the fee income, besides getting a chance to diversify.

--NM