Financial Daily from THE HINDU group of publications
Tuesday, Jan 25, 2005
Financial Daily from THE HINDU group of publications Tuesday, Jan 25, 2005 |
|
|
|
|
|
Money & Banking
-
Co-operatives Insurance agency: Entry norms for UCBs eased Our Bureau
Mumbai , Jan. 24 THE Reserve Bank of India has said that primary urban co-operative banks (UCBs) having a minimum networth of Rs 50 crore can henceforth undertake insurance agency business, without risk participation. Earlier, this kind of business was confined to UCBs with a minimum networth of Rs 100 crore. The central bank has reiterated that no UCB should undertake insurance agency business without obtaining its prior permission. All primary UCBs may also undertake insurance business on a referral basis, without any risk participation through their network of branches. Under the referral arrangement, banks can provide physical infrastructure within their select branch premises to insurance companies for selling their insurance products to the bank's customers with adequate disclosure and transparency, and in turn earn referral fees on the basis of premia collected. Banks must ensure that they comply with the IRDA regulations for undertaking referral business with insurance companies and should not adopt any restrictive practice of forcing customers to go in only for a particular insurance company in respect of assets financed by the bank. The customers should be allowed to exercise their own choice, RBI has said. Banks desirous of entering into referral arrangement, besides complying with IRDA regulations, should also enter into an agreement with the insurance company concerned for allowing use of its premises and making use of the existing infrastructure of the bank. The agreement should be for a period not exceeding three years at the first instance and the bank should have the discretion to renegotiate the terms depending on its satisfaction with the service or replace it by another agreement after the initial period.
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|