The Hindu Business Line : SBI Life to utilise other banking network services

Kolkata April 18 SBI Life Insurance proposes to utilise more of the banking network other than State Bank of India's own as part of its strategy to double the size of business.

Mr Uday Sankar Roy, Managing Director and CEO of SBI Life, told newspersons here on Wednesday that a beginning had already been made with five co-operative banks in various States and there was also a proposal to involve the regional rural banks (RRBs) in this regard. "Unless we do it, others will step in," he said.

"In 2006-07, the co-operative banks gave a paltry business of Rs 20 crore or so, which is likely to go up to Rs 100 crore in the current fiscal," he said. "The arrangements with the RRBs, however, are yet to firm up as these banks are going through the process of consolidation". SBI Life, it was pointed out, had constituted a core group to firm up strategies as to how to go about in this regard.

Also, more and more branches of State Bank of India and its associate banks would be used for selling SBI Life's products. "Only 40 per cent of the total network of 14,000 branches of SBI and its associate banks has been used so far," Mr Roy said adding, "much remains to be done".

In 2006-07, SBI Life's business amounted to Rs 3,000 crore targeted to increase to at least Rs 6,000 crore, if not more, in the current fiscal. In 2005-06, the size of business amounted to Rs 1,000 crore.

Right now, the banking network accounted for 55 per cent of SBI Life's business and the agents the balance 45 per cent. "We would like to maintain this share even on our expanded business," he said. The banking network was certainly more cost-efficient but then it would be wrong to presume that the agency network could be dispensed with. "Right now we have more than 20,000 agents, likely to go up as when the business will expand," he said.

The southern region, as he pointed out, proved to be the growth region for SBI Life, accounting for one-third of the total business. Eastern and North-Eastern regions remained laggards.

Micro-insurance products, especially for self-help groups, were being prepared. "We've to take into account so many things before these products can be launched," he said, adding, "the cost must be low, for SBI Life as well as the policyholders."

SBI Life, according to its Managing Director, will consider IPO at the right time. "Our deadline is 2010 and we'll keep the deadline set by the regulator," he said. "We'll do our valuation at the appropriate time."

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