IOB to distribute National Insurance's products

By Our Corporate Reporter

CHENNAI, JULY 5. Indian Overseas Bank has signed an MoU with the National Insurance Company (NICL) for taking up corporate agency to market the latter's non-life insurance products. The MoU was signed by S. C. Gupta, Chairman and Managing Director, Indian Overseas Bank and Mr. M.K. Tandon, Chairman and Managing Director, National Insurance Company at a function here today.

Mr. Gupta told the gathering that this was the first MoU between a nationalised bank and a nationalised insurance company after the Insurance Regulatory and Development Authority (IRDA) permitted corporates including banks to take up marketing of insurance products.

He said the MoU would draw upon the individual strengths of the two parties to make the corporate agency a synergistic success. IOB had identified 151 branches all over India for the agency and the identified personnel would be sent to NICL for necessary training.

Mr. Gupta said the interest rate deregulation had put pressure on the profitability of banks and there was need to diversify from core banking to fee based activities.

He quoted a recent study by KPMG to show that the Indian banking system with 65,000 branches had a strong base to distribute insurance products.

The National Insurance CMD said insurance was a complex business and a core team would be set up by the two parties to explore how to add value to the insurance business.

NICL has a wide network of 20 regional offices, 272 divisional offices and 664 branches. Like IOB, it too has presence in Hong Kong and Nepal. NICL has a product range of 179 schemes.

The corporate agency of IOB is subject to approval of the Reserve Bank of India and other regulatory authorities.

The IRDA regulations stipulate that all the directors have to undergo training and pass certain tests.

Representations have been made to IRDA by the insurance industry and the chambers of commerce to relax in the stringent regulations.

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