The Hindu Business Line : Corporation Bank to focus on LIC's cash management biz

CORPORATION Bank has sought to cement ties with Life Insurance Corporation, which holds 26 per cent stake in the bank. It plans to focus on LIC's cash management business in a big way.

The bank, which currently supports the bulk of the cash management functions of the country's No 1 life insurer, hopes to step up its involvement on this front, indicated Mr V.K. Chopra, Chairman and Managing Director. He was talking to newspersons here on Monday.

Corporation Bank currently distributes LIC's policies through its branches. The tie-up, which was flagged off in 2001, has so far prompted the bank to open a good number of counters (ATMs included) at LIC's premises. It also markets products offered by National Insurance Company and Export Credit Guarantee Corporation as well as schemes managed by six asset management companies.

At this stage, it is not clear as to whether the relationship with LIC will be alter once the insurer goes ahead with an initial public offering; talks of the IPO are reportedly gathering steam in certain circles. However, Mr Chopra reserved his views on this matter.

Earlier, addressing a meeting organised by FICCI, he underlined the significance of core banking and branch automation - which allow banks to offer a number of useful services. Besides, there are spin-offs like customer databases.

Banks have generally recorded a decent credit growth on the retail front, while the services sector as well as areas such as education and SMEs have absorbed greater credit.

Corporation Bank has over 475 branches under CBS, covering about 80 per cent of its total business.

It has a comfortable capital adequacy ratio, a level that will not lead it towards a fresh bout of capital immediately, it is pointed out.

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