UBS' first major foray into the $73bn (€50bn) Indian mutual funds market has foundered after its agreed $118m acquisition of the Indian funds arm of Standard Chartered Bank collapsed because it failed to secure regulatory approval.

UBS Global Asset Management, which announced the takeover of the Indian mutual funds business in January, said in a statement today it will not proceed with the deal now that the sale and purchase agreement signed by it and Standard Chartered has lapsed.