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To pare down their exposure to non-core assets and raise capital for the core business of lending, state-run banks - <a href="http://www.businessinsider.in/searchresult.cms?query=State+Bank+of+India+%28SBI%29">State Bank of India (SBI),</a> <keyword id="62034" type="CITY" weightage="100" keywordseo="Punjab-National-Bank">Punjab National Bank</keyword> (PNB) and <keyword id="6358007" type="CITY" weightage="80" keywordseo="Bank-of-Baroda">Bank of Baroda</keyword> that hold stakes in <keyword id="126458" type="CITY" weightage="100" keywordseo="UTI-Mutual-Fund">UTI Mutual Fund</keyword> (UTIMF) may exit the nation's oldest <a href="http://www.businessinsider.in/searchresult.cms?query=mutual+fund">mutual fund</a>. 
 
A senior <a href="http://www.businessinsider.in/searchresult.cms?query=Finance+Ministry+">Finance Ministry</a> official said that there had been some discussion on the banks exiting the AMC. "They are looking at a way out," he said. 
 
Three state-run banks jointly hold 55.5% of the asset management company - SBI, PNB and <a href="http://www.businessinsider.in/searchresult.cms?query=Bank+of+Baroda+">Bank of Baroda</a> own 18.5% each. The rest is held by <keyword id="125413" type="CITY" weightage="80" keywordseo="Life-Insurance-Corp">Life Insurance Corp</keyword> (18.5%) and a unit of <keyword id="396042" type="COMPANY" weightage="80" keywordseo="T-Rowe-Price-Group">T Rowe Price Group</keyword> (26%). 
 However, the official did not mention which bank or banks could sell the stake. A proposal to list UTI AMC has been under the <keyword id="47209" type="ORGANIZATION" weightage="100" keywordseo="Finance-Ministry">Finance Ministry</keyword>'s consideration for a while. 
 
Meanwhile, banks have a different story to tell. SBI chairman <a href="http://www.businessinsider.in/searchresult.cms?query=Arundhati+Bhattacharya+">Arundhati Bhattacharya</a> denied any plans to sell the stake. PNB's newly appointed managing director and chief executive, <keyword id="3011695" type="UNKNOWN" weightage="80" keywordseo="Usha-Ananthsubraniam">Usha Ananthsubraniam</keyword>, said it wasn't considering any such proposal. Bank of Baroda interim MD and CEO Ranjan Dhawan could not be reached for comment. 
 UTIMF has more than Rs 1 lakh crore of assets under management. It was carved out of the erstwhile <keyword id="122702" type="ORGANIZATION" weightage="80" keywordseo="Unit-Trust-of-India">Unit Trust of India</keyword> (UTI). 
 
The UTI (Transfer of undertaking &amp; Repeal) Act 2002 passed by <a href="http://www.businessinsider.in/searchresult.cms?query=Parliament+">Parliament</a> had paved the way for the bifurcation of UTI into Specified Undertaking of Unit Trust of India (SUUTI) and UTI Mutual Fund (UTIMF). 
 
Earlier, the Finance Ministry had asked state-run banks to look at divesting their noncore assets in order to meet burgeoning capital requirements. Financial Services Secretary Hasmukh Adhia had recently said that banks were themselves working on their strategy to get out of noncore assets and that they would hive off noncore investments at an appropriate time. 
 
Last week, the government announced a seven-pronged revamp plan for banks. Titled 'Indradhanush', it included a Rs 70,000 crore capitalisation of state-run banks over four years. 
 
(Image: Indiatimes)

Finance Ministry thinks SBI, PNB, Bank of Baroda are planning to exit UTI MF, but SBI has no clue about it

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Finance Ministry thinks SBI, PNB, Bank of Baroda are planning to exit UTI MF, but SBI has no clue about it

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