The Dharwad-headquartered Karnataka Vikas Grameen Bank (KVGB) and New India Assurance Company Ltd have signed a memorandum of agreement (MoU) to offer health insurance facility to the beneficiaries of one of the loan products of the bank.

Speaking at a function to sign the agreement in Dharwad on Thursday, Ashok Reddy, Chairman, KVGB, said it is a unique medical insurance scheme covering both health and accidental risk at a low premium.

Reddy said the bank had recently launched a new loan scheme -- Vikas Janashakti -- aimed at freeing the poor from the clutches of moneylenders. In this, loan repayment is linked to the daily deposits contributed by the accountholders under the pigmy account scheme of the bank.

The insurance scheme with New India Assurance Company Ltd covers the beneficiaries of the Vikas Janashakti with mediclaim facility of up to ₹50,000. The scheme also includes features such as accidental insurance coverage of up to ₹2 lakh at a premium of ₹507.

The insurance scheme covers hospitalisation expenses for self, spouse, two dependent children and mother, he said.

Reddy said most of the loan beneficiaries under Vikas Janashakti were persons of limited means. In such a situation, even a small amount of expenditure towards hospitalisation burdens the family heavily.

Keeping this in mind and also aiming to reach the common man with micro insurance products, the bank has taken a step to enter into an agreement with New India Assurance Company Ltd. In one year, the bank can finance more than 40,000 beneficiaries with an outlay of ₹300 crore spread over more than 3,000 villages in its area of operation, he said.

A press release said here on Thursday that VV Mutalik Desai, Chief Regional Manager of New India Assurance Company Ltd, signed the MoU on behalf of his company. He said that poor families would get cashless treatment at a number of private hospitals in and around the bank’s service area under this health insurance scheme.

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