Mumbai: SBI Mutual Fund, the asset management company promoted by the State Bank of India, is in talks with some banks in the Middle-East for tie-ups to sell its products.

"We are in talks with some Middle-East banks to sell our products. By the end of this financial year, we would finalise at least two tie-ups and the first one is likely to finalised by next week," SBI Mutual Fund managing director and chief executive Syed Shahabuddin said.

He, however, refused to divulge the names of the banks.

"Our offshore fund is mainly dollar and euro denominated, which will have a lot of appeal to foreigners because the investments are made in India and the returns commensurate with the Indian stock market," he added.

Shahabuddin said the company's assets under management would touch Rs40,000 crore from Rs28,000 crore by end of this year.

SBI MF, he said, is also targeting Tier II and Tier III cities to fuel growth. "Our business from these places are just about 30 per cent and 70 per cent mainly comes from the urban areas. We would like it to be at least 50:50," Shahabuddin said.

"Over the past three years, mutual funds have grown at an average CAGR of 40-45 per cent. This year it has again grown by about 45 per cent,'' he said, adding the growth has mainly been led by the market boom.

Meanwhile, SBI Mutual Fund and UTI Mutual Fund have been given the mandate to manage the funds mobilised under the life insurance services provided through the post offices network.

Such services are currently administered by the postal department under the banner of Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) schemes.

The union cabinet on Thursday relaxed the existing provisions of General Financial Rules, thereby clearing the deck for the appointment of these two public sector fund managers.
 
PLI had a corpus of about Rs8,934 crore and RPLI about Rs1,625 crore, as of end-March 2006. These funds are currently lying in a special deposit scheme.