Central Bank of India has signed a new distributorship agreement with HSBC Asset Management (India) Private Limited to offer mutual fund products to its customers. With this partnership, Central Bank of India customers will be able to invest in a wide range of HSBC mutual fund schemes directly through the bank’s distribution network.
The move is aimed at helping customers grow their savings by providing access to professionally managed investment products. By adding HSBC mutual funds to its offerings, Central Bank of India is expanding its bouquet of third-party financial products and strengthening its wealth management services.
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HSBC Asset Management (India) Private Limited was set up in 2001 and manages the mutual fund business of HSBC Mutual Fund in India. HSBC Mutual Fund operates as a trust under the Indian Trusts Act, 1882, with HSBC Securities and Capital Markets (India) Private Limited as the sponsor and HSBC Trustees (India) Private Limited as the trustee.
In November 2022, HSBC Asset Management further strengthened its presence in the Indian mutual fund industry by acquiring L&T Investment Management Limited, the asset management arm of L&T Financial Holdings Limited. As of December 2025, HSBC Asset Management reported an average daily assets under management (AUM) of Rs. 1.38 lakh crore, highlighting its strong position in the Indian mutual fund market.
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This partnership is expected to benefit Central Bank of India customers by giving them more investment choices and easier access to mutual fund products through their trusted bank branches.
While the tie-up is aimed at offering more investment options to customers, some banking experts have raised concerns that such partnerships may lead to diversion of bank deposits into market-linked products like mutual funds. Fixed deposits and savings accounts are considered safer instruments by many customers, especially senior citizens. If customers move a large portion of their savings from deposits to mutual funds without fully understanding the risks, it could expose them to market volatility.
Experts also warn that a significant shift of funds away from deposits may reduce banks’ deposit base, which can impact overall liquidity. Lower liquidity could affect banks’ ability to lend, manage daily operations, and meet funding requirements.
Therefore, experts say banks must ensure proper disclosure, investor awareness, and suitability checks so that customers make informed decisions and banking stability is not adversely affected. Recently, the Reserve Bank of India (RBI) had injected over Rs 2 lakh crore of liquidity into the banking system. There are reports that the banking system is suffering from liquidity crisis.
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