PNB plans to tap HNIs, may offer portfolio services

For a country witnessing 19% growth in its number of high net worth individuals (HNIs), this sure is opportunity for banks like Punjab National Bank, which is planning a foray into offering portfolio management services (PMS). It is currently waiting for regulatory approvals. “We are looking to enter the portfolio management space. But as public sector banks, we are not allowed to offer advisory services. We are sorting some regulatory issues with the RBI,” a top official at the bank said. The RBI rules say a bank must firewall its PMS portfolio from its other business, to ensure that the bank’s exposure in capital markets does not affect its balance sheet. Also banks have to obtain a dual licence from RBI and Sebi, before they can offer discretionary PMS - i.e., manage the funds actively on behalf of their clients. At present, public sector banks are losing out to foreign and private banks in offering such services.