RBI issues draft guidelines on entry of banks into insurance broking

The Reserve Bank of India (RBI) has permitted banks to undertake insurance broking business provided they have set up a separate department to look after the business.

Since insurance broking is a knowledge-intensive activity, which requires professional expertise, this will be permitted subject to certain conditions, RBI said.

Banks wanting to offer insurance broking services would be required to seek specific prior approval of the Reserve Bank of India, the central bank said in its release.

RBI will grant approval for such banks to undertake insurance broking business for an initial period of three years subject to review thereafter.

RBI today released 'Draft Guidelines on Entry of Banks into Insurance Business – Insurance Broking Business' on its website today and has sought comments and feedback.