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Punjab National Bank (PNB), the country’s second largest public sector bank, intends to divest its shareholding in Canara HSBC OBC Life Insurance Co Ltd, a life insurer that started its journey in 2008.
Post the amalgamation with Oriental Bank of Commerce (OBC) from April 1 last year, PNB had become promoter-shareholder, with 23 per cent stake in Canara HSBC OBC Life Insurance.
While Canara Bank has 51 per cent stake, HSBC Insurance (Asia Pacific) Holdings has 26 per cent stake in the life insurer, which is now an associate company of PNB.
PNB will divest stake in the associate company Canara HSBC OBC Life Insurance at an “appropriate time, depending on market conditions and available options”, said the bank in a regulatory filing to the stock exchanges.
IRDAI norm
This plan is in keeping with insurance regulator IRDAI’s norm that a commercial bank should not hold more than 10 per cent stake in two life insurance ventures at the same time, said sources.
Post the OBC amalgamation, PNB had significant shareholding in two life insurance ventures – PNB MetLife Insurance (30 per cent stake) and Canara HSBC OBC Life (23 per cent stake).
Canara HSBC Oriental Bank of Commerce Life Insurance was set up as three-way joint venture between Canara Bank, HSBC and OBC and had commenced operations in June 2008. It has a paid-up capital of ₹950 crore and assets under management of ₹20,586 crore. The life insurer has about 24 products for individuals and seven products for Group. Till December-end last year, the life insurer had sold 11.72 lakh policies.
Last year, in April, soon after the amalgamation with OBC, PNB Managing Director Ch SS Mallikarjuna Rao had told BusinessLine that PNB was not looking at an exit from Canara HSBC Oriental Bank of Commerce Life Insurance, and would continue with its shareholding in both PNB MetLife Insurance as well as Canara HSBC OBC Life for the next few years.
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