Andhra Bank and Bank of Baroda (BoB), have entered into a joint venture with their British Partner Legal & General to start a life insurance company called IndiaFirst.
IndiaFirst life insurance is the 23rd participant in the life insurance business. The company has an equity capital of Rs. 3.3 billion and is headquartered in Mumbai. BoB has a 40 % stake while Andhra Bank has a stake of 30 % in the firm. The rest 26% is belongs to the British partner Legal and General. 26% is the highest permitted limit in the sector.
As the Government has given its no objection for government banks to venture into non banking business, the banks have begun entering the area of insurance and mutual funds.
The new company was inaugurated by Finance Minister, Mr. Pranab Mukherjee. He said, “Insurance has huge market potential and insurance is a key area where we require more penetration and reach. The insurance sector has immense opportunity to grow not in terms of just providing life insurance, but also in its contribution to overall economic growth, by augmenting savings”.
He also said, “I hope this life insurance joint venture to penetrate in to hitherto uninsured areas in rural areas; it should also generate more business opportunities”.
Bank of Baroda chairman and managing director MD Mallya, will be the chairman of the insurance company. He said that the bank will be marketing the insurance products of IndiaFirst from its 1, 150 branches. Now after traditional businesses like car loans, it seems Indian banks are now entering other financial sectors.