Punjab National Bank (PNB), a state-owned lender in India, has secured approval from the Indian government to divest its entire stake in UTI Asset Management Company (UTI AMC).

Founded in 2002, UTI AMC handles investment management operations of UTI Mutual Fund.

The firm also looks after the offshore funds as well as offers support to Unit Trust of India’s specified undertaking.

India’s four major public sector financial giants, State Bank of India, Life Insurance Corporation of India, Bank of Baroda and PNB, jointly own a 45.16% stake in UTI AMC.

The latest approval, granted by department of investment and public asset management (DIPAM) under the Ministry of Finance, allows PNB to carry out the sale either in single or several phases.

The divestment is part of the bank’s non-core asset sale strategy to grow its capital.

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PNB, which currently holds a 15.22% stake in UTI AMC worth around INR13.29bn ($162m), is yet to decide on the timeline or value of the divestment.

The approval is subject to Securities and Exchange Board of India (SEBI) compliance.

PNB said in a regulatory filing: “The Exchange is hereby informed that the Bank has received approval of DIPAM, Ministry of Finance, Government of India for divestment of Bank’s entire/part stake in UTI Asset Management Company in single or multiple tranches subject to compliance of SEBI Regulations/other applicable regulatory guidelines.”