Mumbai, Sept. 25: The proposed insurance venture of Punjab National Bank (PNB) appears to be jinxed as the bank’s likely ally, Zurich Financial Services, has decided to defer further investment in India. However, the bank failed to give any reason behind the decision.

Informing the Bombay Stock Exchange of the development, PNB stated that it would not proceed with the insurance joint venture with Zurich Financial Services, Switzerland, as envisaged earlier.

Prior to this, PNB’s insurance plans had run into another wall after the Reserve Bank of India raised certain objections regarding its earlier move to induct DCM Sriram Consolidated Ltd (DSCL) as one of its partners. The RBI then issued a directive asking PNB to approach it for approval only after identifying a new partner “in lieu” of DSCL. This was because DSCL was availing credit limits with PNB, the bank had informed stock exchanges then.

Apart from DSCL and Zurich Financial Services, the other partner in the insurance venture included Vijaya Bank. Zurich had, in fact, announced its entry into the country’s life insurance and general insurance sectors with its participation in the four-way insurance venture.

It was then decided that Zurich would hold a 26 per cent stake in each of the two ventures. DCM Sriram Consolidated Ltd, which is active in the fertiliser, sugar, chemicals and plastics businesses, was to hold a 35.5 per cent stake.

PNB and Vijaya Bank were to hold 26 per cent and 12.5 per cent respectively in both the joint ventures. Zurich already owns Zurich Asset Management Company (India) Pvt Ltd and Zurich Risk Management Services (India) Pvt Ltd.

The induction of Vijaya Bank and DSCL came after an earlier attempt by PNB to venture into the insurance business. On that occasion, the bank had said it would acquire a 15 per cent stake in the insurance company being promoted by Zurich Financial Services and the Hero Honda Group for both life and non-life insurance business.

PNB, sources say, plans to use its vast retail network would be used for distribution of the insurance products.

FCNR (B) rates revised

PNB has revised the interest rates on foreign currency non-residents banks (FCNR-B) scheme for dollar, pound and euro deposits from September 27.

Interest on dollar deposits put for 1-2 years would get 1.6 per cent, for 2-3 years, 2.15 per cent and for deposits of three years, 2.6 per cent, the bank said in a release today.