The Hindu Business Line : PNB Gilts seeks RBI nod for portfolio management

PNB Gilts Ltd, the primary dealer subsidiary of Punjab National Bank, has approached the Reserve Bank of India for permission to offer portfolio management services (PMS) to clients.

The company is also in the process of acquiring the requisite skills to undertake trading in rupee derivatives.

"Our aim in the medium term is to become a full-fledged investment bank," said the Managing Director, PNB Gilts, Mr I.D. Singh.

He said that the company's ongoing search for a strategic partner was aimed at fulfilling this goal. "If a strategic partner can contribute to our move towards becoming a one-stop investment bank, we would certainly like to look at the proposals," he added. He, however, said that the company had not yet zeroed in on the possible partners.

Mr Singh said that for PMS services his company would target high networth individuals, provident fund trusts and corporates with surplus funds. "We may offer the services to non-resident Indians by opening a separate desk for them," he said. The PMS investment activity would be restricted to the Government securities market.

Besides the need for RBI approval, taking up PMS activity would also require the assent of the Securities and Exchange Board of India. "We plan to move SEBI soon," Mr Singh said. He said that the company already had a licence for taking up merchant banking activities.On the interest rate scenario, Mr Singh felt that there would not be much movement either way. "We expect interest rates to remain range-bound in the short-term," he said.

Mr Singh said that PNB Gilts hoped to show a major improvement in its net profit during the current financial year compared to the previous year. For the half-year ended September 30, 2003, the company has declared a net profit of Rs 86 crore, a 327-per cent rise compared to the corresponding period in the previous year.

The turnover rose by 173 per cent during the period to over Rs 71,000 crore.

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