The Unit Trust of India Mutual Fund, the country's largest public sector mutual fund, is planning to rope in foreign banks as third-party distributors to strengthen its distribution network.

With assets under management of more than Rs 20,000 crore (Rs 200 billion), including the recently-merged schemes of IL&FS MF, the fund has decided to sell its financial products through foreign banks and is close to signing deals with three foreign banks.

According to market sources, ABN Amro Bank, BNP Paribas and Standard Chartered are said to be in talks with UTIMF and are expected to ink the deal soon.

The fund has already tied up with three public sector banks -- Bank of India, Corporation Bank and Allahabad Bank -- to sell its financial products through their branches and is in talks with a Mumbai-based public sector bank for further reach.

Ashutosh Bishnoi, UTIMF chief marketing officer, said, "We are exploring various distribution channels to further strengthen our sales network. This initiative will enable us to offer our comprehensive range of mutual fund products to a wider segment of the society and we expect 20 to 25 per cent growth in AUM to come through third-party distribution by the end of this year."

At present UTIMF meets the investment, savings and retirement planning needs of its investors primarily through its core financial advisors, a distribution network of 55 financial centers, which is set to increase to 110 by the end of 2004, direct marketing and through 180 branches of Indian Bank, 70 branches of Corporation Bank, 125 branches of Bank of India and 150 branches of Allahabad Bank across India.

UTIMF is also planning to increase its agency force to over 10,000 during the current financial year.

With the acquisition of IL&FS MF recently, IL&FS Investmart is also distributing UTIMF's products as the preferred fund house.

At present 70-80 per cent of the total AUM for most private sector mutual fund players is brought in by third-party agents, while for UTIMF the chunk of the contribution is through wide distribution network of own agents.