The Hindu Business Line : Co-op banks can do insurance biz on referral basis

THE Reserve Bank of India has allowed all State and district co-operative banks to undertake insurance business on a referral basis, without any risk participation through their network of branches.

The banks need not obtain prior approval of the central bank to undertake referral business, a press release from RBI said.

This means that insurance companies can sell their products on the branch premises of State co-operative banks and District co-operative Banks. The banks can charge referral fees on the basis of premia collected.

The release said that banks should comply with IRDA regulations for undertaking referral business. "The bank should not force its customers to buy products of a particular company and customers should be allowed to exercise their own choice," RBI said.

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