State-run Union Bank of India, (UBI) has entered into an agreement with financial service company, KBC Asset Management NV, to form a joint venture asset management company in India.

KBC asset management NV is a wholly-owned subsidiary of KBC group of Belgium and has strong presence in central eastern Europe and Belgium.

As per the deal, Union Bank will hold 51% stake in the joint venture company, while the remaining 49% will be held by KBC.

The bank has plans to use 1,000 of its branches for the mutual funds venture in the initial phase and scale up to include all branches in the future. The proposed entity is expected to get operational in the next 3-6 months, after receiving necessary regulatory approvals.

Union Bank already has a JV with Bank of India and Japanese life insurance firm, Dai-Ichi, in which it holds a 23 per cent stake.