Delhi: Public sector banks, Canara Bank and Oriental
Bank of Commerce (OBC), have decided to float a life insurance
venture along with the insurance arm of HSBC, Insurance
(Asia Pacific) Holdings Ltd.
three-way insurance joint venture would have Canara Bank
as the lead partner with a 51-per cent stake in the proposed
insurance joint venture. OBC would hold 23 per cent and
HSBC Insurance the remaining 26 per cent, the maximum
permissible limit for foreign partners at present.
Under the agreement, HSBC Insurance will
provide management services, and the tie-up will have
access to a nationwide customer base of more than 40 million.
new life insurance company will have a paid up capital
of Rs325 crore of which HSBC would contribute Rs170 crore,
which includes premium for accessing the vast branch network
of public sector banks.
Life premium incomes in India have grown at an annual
21 per cent since the market was opened to private players
in 1999, and exceeded $20 billion in 2005. And, with an
insurance penetration rate of 2.5 per cent in 2005, the
Indian market has tremendous long term growth potential.
Bank will invest Rs102 crore, while OBC will contribute
Rs46 crore. The new venture is expected to get off the
ground by the end of this fiscal.