Canara Bank, HSBC and Oriental Bank jointly float life insurance company

10 September 2007

Chennai: Two public sector banks, Canara Bank and Oriental Bank of Commerce, have joined hands with HSBC Insurance (Asia-Pacific) Holdings to float a life insurance venture in India.

The trio, which has announced plans to set up an insurance venture in March this year, also signed a formal agreement for setting up the JV.

Christened Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited, the new life insurance company will have an equity base of Rs200 crore. Canara Bank will hold 51 per cent stake in the life insurance company while HSBC Insurance (Asia-Pacific) and Oriental Bank of Commerce will hold 26 per cent and 23 per cent respectively.

HSBC Insurance has contributed Rs125 crore as premium for its 26 per cent stake while Canara Bank and Oriental Bank are subscribing to the capital at par value.

Under the terms of the agreement, HSBC will provide a range of management services, which will include nominating executives for certain senior roles.

"The business model will be largely bancassurance driven. The life insurance company will leverage the extensive branch network of the three promoters and their large customer base," says Harpal S Karlcut, CEO designate of Canara HSBC Oriental Bank of Commerce Life Insurance.