Financial Services provider India Infoline Group today said it has got SEBI's approval for

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commencing mutual fund business.

The company has received the SEBI's final approval for IIFL Mutual Fund, India Infoline said in a statement.

"This enables commencement of mutual fund business and launching of mutual fund schemes in due course," it said.

"I think mutual funds offer an easy and convenient way for the small retail investor to participate in India’s growth story. IIFL, with its distribution reach spanning over 500 cities, is well placed to take the mutual fund penetration wider and deeper," IIFL Group Chairman Nirmal Jain said.

Today, top 10 cities account for about 80 per cent of mutual fund mobilisation and there is a huge opportunity in tier-II and tier-III cities, he said.

"We are working on launch of new products in the next two months. Initially, we may look to start with Index and exchange traded funds kind of products," he said.

Mutual fund business is highly competitive with over 40 asset management companies operating in the country. The average assets managed by industry stood at Rs 6,75,377 crore on December 31, 2010