Bank of Rajasthan in talks for insurance foray

Mumbai: Bank of Rajasthan (BoR) is close to concluding its deal with either Tata AIG Life Insurance Company or Birla Sun Life Insurance Company, as part of its plan to venture into the life insurance segment, it is learnt. Talks with both the companies are said to be in an advanced stage. The bank will strike a deal with one of these life insurance providers by next month, say BoR officials. "We were in talks with almost all life insurance providers in India, including LIC. Now we have short-listed Tata AIG and Birla Sun Life, and the final partner will be selected within a month."

As per the current plan, BoR will act as a corporate agent of the selected company and will sell life insurance products of the same through the banks counters once the bancassurnace concept comes into effect. It is expected that the Insurance Amendment Bill will be passed by the government in the monsoon session of the parliament. Last week, the bank had tied up with Bajaj Allianz to sell its general insurance products through its counters.

A BoR official says initially the bank will launch the insurance products in its selected branches in Rajasthan and then, depending on the feedback, it will be extended to other branches. BoR is one the leading banks in Rajasthan with a strong rural penetration. Industry observers say at present all life insurance providers are in the process of finalising plans to tap Indias rural market. A lions share of LICs new business comes from rural and semi-rural markets.

In a country of 1 billion people, bancassurnace is one of the profitable and cost-effective options for private sector life insurance providers to tap the huge market, the observers say.