Mumbai, Dec. 19: Nationalised banks are steadily leveraging their large branch network for distributing insurance and mutual fund products. Two leading nationalised banks, Bank of India and Union Bank today announced separate alliances with mutual fund and insurance majors to distribute their products.
BoI said it has signed an arrangement with ICICI Prudential Insurance Company for “providing referrals for sale of life insurance products”. The arrangement, the bank added, is operational in 152 branches.
The bank has also entered into an alliance with DSP Merrill Lynch Investment Managers for distribution of DSP Merrill Lynch’s mutual fund products. Initially, the venture will be rolled out in 20 branches in nine zones. BoI said these alliances are part of its strategy to increase its product range. The bank has over 2,550 branches in the country.
“The initiative will help us cater to the various financial needs of our customers in the changed scenario. At the same time, the tieup gives us an opportunity to utilise the existing infrastructure and customer base to augment our fee-based income,” BoI chairman and managing director K. V. Krishnamurthy said.
Officials here added that the bank had already put in place a marketing infrastructure for distribution of mutual fund and all staff members who are engaged in this distribution initiative are AMFR certified and have been imparted training on the products.
Union Bank too has signed an agreement with HDFC Standard Life to market the latter’s life insurance products. This follows approval from the Reserve Bank of India and the IRDA to take up corporate insurance agency.
Another prominent player eyeing the fee-based income generated from such alliances is Corporation Bank. Earlier, the Mangalore-based bank had entered into an agreement with Life Insurance Corporation (LIC) following which the latter also lifted an equity stake in the bank. Subsequently, it entered into an alliance with New India Assurance where it acted as a corporate agent of the general insurance major. Corporation Bank then said it will permit the use of its ATMs for premia payment by New India Assurance’s policy holders apart from payment of their claims and that the insurance firm would consider the bank’s proposal to route its securities through Corp Bank Securities Ltd.