Chennai: The Tuticorin-based Tamilnad Mercantile Bank (TMB) has designed a new recurring deposit scheme `TMB Siranjeevee Recurring Deposit Scheme' which comes with a built in life insurance cover.
As per the scheme, the lives of deposit holders will be covered for a value that is equivalent to the maturity value of the recurring deposit. In the event of a depositor's death, the legal heirs will get the accumulated deposit amount including the interest and also a sum equivalent to the scheme's maturity value. In the case of accidental death, the insurance compensation will be doubled.
The insurance cover is offered by AMP Sanmar Life Insurance Company Limited. The two organisations signed a MoU in this regard on 26th February 2005.
According to TMB's deputy general manager, S Selvan Rajadurai, the recurring deposit scheme will carry an interest rate of 6.75 per cent. The life insurance premium will be paid out of the accumulated interest. "For a deposit with a maturity value of Rs1 lakh the premium is Rs 413.25." The upper age limit for a deposit holder is 55 years.
The bank hopes to mobilise around 50,000 deposit accounts in the first year. "The scheme is open for even small depositors who are in rural areas. The thrust is to increase the bank's depositor base," said TMB's chairman S Radhakrishnan.
For a long time TMB wanted to get into selling insurance policies and has been holding talks with insurers like AMP Sanmar. According to AMP Sanmar's vice chairman SV Mony, this is a first step and the bank may become the company's bancassurance partner.
According to B Natraj, director and COO, AMP Sanmar, this deal is part of its focus on the corporate group insurance segment. It may be recalled the company recently launched a group insurance scheme for the dealers of a mobile telephony company.
With its business growing, AMP Sanmar got a fresh infusion of equity of Rs 57.10 crore from its two promoters viz., Sanmar Group and AMP, Australia. The total equity of the company now stands at Rs 217.50 crore.
In 2005 AMP Sanmar plans to open around 27 branches of which nine will be in Maharashtra. The total number of branches will touch 103.