Kotak Mahindra Bank gets RBI nod to form general insurance arm

Days after Kotak Mahindra Bank Ltd announced the acquisition of rival ING-Vysya Bank in an all-stock deal, the private sector lender today received Reserve Bank of India (RBI) approval to form a new subsidiary for general insurance business.

The RBI approval follows the in-principle approval from the Insurance Regulatory and Development Authority (Irda) and Kotak will now apply to complete the process of registration of the new company with insurance sector regulator, the bank said in a press release.

''The general insurance business in India is currently a Rs77,000-crore premium per annum industry and is growing at a healthy rate of 17 per cent. It provides a cover of close to Rs 1,000 lakh crore,'' Gaurang Shah, president - asset management, insurance and international business, KMBL, said.

''With the addition of general insurance business, Kotak Mahindra Group with existing presence across banking, wealth management, life insurance, broking, mutual funds and private equity will be able to offer the complete range of financial products and services to our retail and wholesale customers. Our knowledge and experience across the BFSI spectrum generates excellent cross synergies that we hope to leverage in our general insurance business to the benefit of our customers and stakeholders alike,'' Shah added.

Mahesh Balasubramanian, who is currently executive vice president and co-head, branch banking at Kotak Mahindra Bank, has been named as chief executive officer of the new venture. Balasubramanian has over two decades of cross functional experience in financial services. He has spent over a decade with Kotak Mahindra Group. He was part of the integral team that helped grow the consumer bank and its branch network.

''With Kotak Mahindra Group's increasing distribution network, growing brand equity and consumer franchise, we believe we will be able to leverage synergies and add significant value to the general insurance business. Being a new entrant, we will have opportunities to embrace new technologies and developments in the digital world to provide innovative products and solutions which will deliver superior customer experience,'' said Balasubramanian.