Money & Banking

Syndicate Bank plans joint venture to enter life insurance sector

M. Somasekhar Hyderabad | Updated on March 12, 2018

Anjaneya Prasad

Syndicate Bank has firmed up plans for diversifying into insurance business. It has decided to form a joint venture with a large insurer to enter the life insurance sector.

The Executive Director of the Manipal-headquartered bank, A. Anjaneya Prasad, told Business Line : “We have shortlisted the company and will announce the name as soon as we get the okay from the Reserve Bank of India and the Insurance Regulatory and Development Authority”.

The bank has a small presence in the bancassurance sector with a tie-up with the General Insurance Company for general insurance products such as vehicle and accident insurance. It has a tie-up with Tata AIG for group life insurance to housing loan customers.

The efforts of the bank to enter the insurance sector pan several years. In 2011, it had shortlisted four domestic insurance companies, which included Birla Sun Life, Aviva Life and Reliance Life.

The move is in line with the bank’s strategy to grow rapidly in the fee-based income sector. Syndicate Bank has tied up with atleast nine mutual funds. It is gearing up, including training its staff, to vend these products.

Referring to its efforts to raise capital, Anjaneya Prasad said the bank is likely to raise around Rs 1,000 crore in December under tier- II bonds. It would be used to meet future credit requirements and Basel-III norms.

He said the bank received very good response to the medium term note issue. “We raised $500 million (approximately Rs 2,600 crore) in the London market. The issue was oversubscribed five times, with investors mostly from Singapore, Gulf and Europe.

The bonds, with a five-and-half year tenure, are tradable, and would meet the credit requirements serviced through the London branch.

On international expansion, he said the bank was looking at opportunities in Africa, Europe and Asia.


Published on October 25, 2012

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