IDBI Bank and Life Insurance Corporation of India have signed a bancassurance agreement under which the lender will offer LIC’s insurance products at its branches.
“IDBI Bank as a corporate agent of LIC would get a window to provide LIC’s entire gamut of insurance offerings to the bank’s 1.80-crore customer base spread over 1,800 branches across the country,” the bank said in a statement on Wednesday.
Preferred bank
As part of the service-level agreement, the bank will become the preferred bank for LIC premium payments and also function as premium point to boost sale of LIC products, thereby gaining from fees and float income, it further said.
The move comes soon after the State-owned life insurer acquired a majority stake in IDBI Bank. The lender has also appointed LIC Chairman Hemant Bhargava as its non-executive whole-time Chairman.
“IDBI Bank is fundamentally strong, having a young, energetic and talented work-force which will help in selling LIC products. This will enable the Bank to add to its revenue growth and simultaneously help LIC in increasing its bancassurance business,” Bhargava said.
The bank is hopeful that its “sizeable presence” in the rural and semi-urban areas will help to penetrate LIC’s product offerings further while its diversified product base would enable targeting the high-net worth individuals in metro and urban areas.
“Since client centricity shapes the core mission of both the organisations, it will be a mutually beneficial association and we are looking forward to working closely with LIC,” said Rakesh Sharma, Managing Director and CEO, IDBI Bank.
Significantly, IDBI Bank already has stake in IDBI Federal Life Insurance Company.
The lender’s scrip fell 1.42 per cent on BSE and closed at ₹41.70 apiece.