The Hindu Business Line : Union Bank picks SBI Life for home loan cover

Mr S.Krishnamurthy, MD & CEO, SBI Life Insurance (left), with Mr V. Leeladhar, CMD, Union Bank of India, at a press conference in Mumbai on Wednesday. - - Shashi Ashiwal

Mumbai , April 7

UNION Bank of India has tied up with SBI Life Insurance Co Ltd to provide life insurance cover to the bank's home loan borrowers.

Under the scheme, which is optional, in the event of the borrower's death, SBI Life will pay the entire balance loan directly to the bank. The insurance cover is available for a minimum loan of Rs 50,000 and a maximum of Rs 50 lakh, with the tenure of the loan extending from five to 20 years.

The premium would be linked to the loan amount, tenure and age of the borrower.

The premium will be included in the loan EMI, said Mr V. Leeladhar, Chairman and Managing Director, Union Bank of India, addressing a press conference here on Wednesday.

Referring to the choice of SBI Life over HDFC Standard Life Insurance with whom the Union Bank of India has a bancassurance tie-up, Mr Leeladhar said ``the choice was made after a study of schemes of several entities and we found that this product was best suited for our customers''.

The bank expects around 8,000 home loans to be covered under this scheme in the financial year 2004-05, said Mr Leeladhar.

"The home loans of the bank in financial year 2003-04 have grown from Rs 1,500 crore to Rs 1,800 crore and housing portfolio was rising by 20-21 per cent every year", he said.

Speaking on the occasion Mr S. Krishnamurthy, Managing Director and CEO, SBI Life, said, the company was offering such a product to the home loan customers of SBI, its seven associates, some private housing finance companies and United Bank of India.

``On an average, about 50-60 per cent customers from SBI opt for this scheme and we are getting about12,000 applications per month'', he added.

Advances up 19 pc on retail strength

UNION Bank of India has recorded a 19.02 per cent rise in advances at Rs 31,340 crore for the fiscal 2003-04 (Rs 26,332 crore).

The deposits of the bank in the period under review also increased by 14.24 per cent at Rs 50,446 crore (Rs 42,158 crore).

The advances were driven by the retail segment, which rose from Rs 5,085 crore to Rs 6,230 crore, up by 22.52 per cent, said Mr V. Leeladhar, Chairman and Managing Director, Union Bank of India.

Housing loans recorded a growth of around Rs 300 crore to Rs 1,800 crore in the financial year 2003-04.

The bank collected a premium income of Rs 12 crore, which earned them a commission of Rs 2.6 crore in the fiscal 2003-04, he said.

Under the general insurance sales, he said the bank has covered assets of over Rs 3,000 crore in the period under review.

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