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Sabre mutual fund foray via Centurion

Mumbai, Dec. 8: Centurion Bank, which is in the midst of a restructuring exercise, is likely to be the vehicle for Sabre Capital’s plan to foray into the mutual fund business. This follows Sabre decision to put in the backburner its earlier plan to team up with Samir Arora in setting up an asset management company.

While the plan to join hands with Arora is virtually off, top officials of Sabre said it is still keen to enter into the mutual fund business in India. Though Centurion Bank will be the ideal platform, its board’s permission would be sought first for the mutual fund foray.

“The proposal will be put forth before the board of the bank,” he said.

The official was of the opinion that a foray into the mutual fund business would be an ideal venture for Centurion which would now stress on the retail segment and consumer servicing.

“The idea is to make the bank a one-stop shop for various financial products,” he added.

Sabre, was founded by Rana Talwar, the former group chief executive of Standard Chartered Plc and executive vice-president and policy committee member of Citicorp, to invest in the financial services sector in the emerging markets.

It may be recalled that soon after Sabre announced its decision in reviving Centurion Bank through infusion of capital, it joined hands with Samir Arora, earlier with Alliance Capital, to enter into fund management business.

However, soon after Arora found himself in a controversy that prompted the Securities and Exchange Board of India (Sebi) to bar him from any activity in the capital market.

Sabre is in the final stages of sewing up a fund infusion programme for Centurion Bank. This will see the bank attaining a capital adequacy ratio above 10 per cent.

Subsequent to the infusion, plans are to push for an organic growth first. This will see the bank building a nationwide brand apart from focusing on the retail segment.

Talwar, sources said, has already identified two-wheeler finance area as one of the areas of focus for the bank. It may be recalled that Centurion Bank was earlier the market leader in this segment.

However, the bank saw this market share getting diminished due to the difficulties that engulfed it.

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