Comments
Belgium insurer Ageas increasing its stake in Ageas Federal Life Insurance Company has ended a period of instability in the joint venture and has positively impacted the morale of the employees, said Vighnesh Shahane, Managing Director and CEO, Ageas Federal Life Insurance to BusinessLine .
‘Positive intent’
While there is a likelihood that Ageas could further increase its stake to 74 per cent in the private sector life insurer, the Federal Bank’s proposal to increase stake to 30 per cent has, however, been discouraged by the Reserve Bank of India (RBI).
“If Ageas does step up to 74 per cent –there is a very positive intent to do so and they are just awaiting certain amendments to the Act – then I think there is a very strong likelihood that they would buy out the IDBI Bank stake,” Shahane said.
Federal bank’s view
“In the case of Federal Bank, it wanted to step up its stake to 30 per cent but the RBI has discouraged banks from increasing stake and wants to focus more on their core activities and preserving capital, especially at this time,” he further said.
Last year, the insurer has announced its rebranding to the Ageas Federal Life Insurance Company after Ageas Insurance International increased its stake to 49 per cent by acquiring 23 per cent stake from the IDBI Bank. The Federal bank now holds 26 per cent stake in the insurance joint venture while IDBI Bank has 25 per cent holding.
Purchase agreement
The Federal Bank had in August 2020 entered into an agreement to purchase up to 4 per cent stake in the insurance company from the IDBI Bank, that would have taken its total stake to 30 per cent.
The Federal Bank did not comment on an email query by BusinessLine on the status of its proposal to the RBI to increase its stake. The increase in shareholding of Ageas to 49 per cent happened in December last year and Shahane said it has infused new vigour, optimism and hope in the company.
“We have been doing well and the immediate strategy is to continue doing the things we do well and also fix our distribution,” he said. After the announcement in the budget this year, Parliament approved the amendment in the Bill for raising the FDI limit in the insurance sector to 74 per cent from 49 per cent.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.