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K.R. Srivats

To prepare a biz plan for life insurance joint venture

MR M.B.N. RAO

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New Delhi March 6 Canara Bank has roped in Ernst & Young to come up with a business plan for its proposed life insurance joint venture with HSBC Insurance and Oriental Bank of Commerce (OBC). The consulting firm has also been mandated to obtain regulatory approvals for the venture.

"Ernst & Young will also help us in regulatory filing and approval. They had advised us on the deal," Mr M.B.N. Rao, Chairman and Managing Director of Canara Bank, told Business Line.

Sources pointed out that a business plan has to be filed in advance with the Insurance Regulatory and Development Authority for obtaining the necessary approvals. Ernst & Young had advised Canara Bank in the negotiations with the potential international partners and in the finalisation of the memorandum of understanding (MoU).

Canara Bank, HSBC Insurance and OBC signed a MoU on Monday for the establishment of life insurance joint venture. While Canara Bank would take 51 per cent holding, HSBC Insurance and OBC would take 26 per cent and 23 per cent stake respectively. The paid up capital of the joint venture would be Rs 200 crore.

With the finalisation and signing of the MoU, sources said that the next step would be the finalisation of the definitive joint venture agreement. The target is to finalise the definitive joint venture agreement by April this year.

More Stories on : Life Insurance | Public Sector Banks | Consulting

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