Union Bank of India, one of the largest public sector banks in the country, expects to start its asset management company (AMC) by May, M V Nair, its chairman and managing director, said on Sunday.

The AMC, where the bank will hold 51 per cent stake, and KBC, a Belgian AMC, will hold the rest, is set to foray into the mutual fund space by May. “We have already identified the chief executive officer and other senior management,” Nair said on sidelines an event in Kharibona village (in West Bengal). The AMC is likely to compete with other bank AMCs such as SBI Mutual Fund, Canara Robeco Mutual Fund, HDFC Mutual Fund and ICICI Prudential Mutual Fund, among others.

On the lender’s non-performing assets (NPA), Nair said he expects Union Bank of India to close this financial year with a gross NPA of under 2 per cent. “NPA levels are still in the manageable zone. For the industry as whole, the growth of NPA has been faster than growth of credit. Earlier, we have restructured loans worth Rs 4,700 crore. Out of this, there has been a slippage of 5 per cent so far,” Nair said.

Union finance minister Pranab Mukherjee also launched Union Bank of India's 21st village knowledge centre. He also inaugurated the bank’s Management and Skill Development Institute (MSDI) in collaboration with Small Industries Development Bank of India (Sidbi). As a major step towards financial inclusion on the date of opening of the Jangipur branch by Mukherjee on Sunday, 4,800 no-frills accounts have been opened, of which 1,800 were opened through branches and 3,000 through branchless banking, Nair added.