Insurers and fund houses see payments banks (PBs) as a boon for the sector as opportunities of cross-sell would help deepen their reach in rural areas.
“For any new network like payments banks, there will be an opportunity for us to grow our business and there could be some online sale opportunities through payments banks,” SBI Life MD and Chief Executive Arijit Basu told PTI.
“However, we are not looking at the financial inclusion drive through payments banks as we have already issued 50 lakh policies under the flagship financial inclusion drive Pradhan Mantri Jan Dhan Yojana so far,” he added.
The RBI gave ‘in-principle’ approval to 11 applicants to set up payments banks — the first of its kind licences for differentiated banks that can sell third-party mutual fund (MF) and insurance products.
Echoing similar views, ICICI Lombard Head (underwriting and claims) Sanjay Datta said: “Entities that are able to distribute insurance products to bring down insurance under-penetration are welcome. These new distribution channels are also likely to bring our cost down as they will be working on a digital platform. We are looking at increasing our business in the low-ticket segment.”
HDFC MF Managing Director and CEO Milind Barve said, “Payments banks will become authorised distributors of mutual funds, on the lines of commercial banks. It will provide one more option for our respective customers to use payments banks to invest their money in mutual funds.”
National Securities Depository Limited (NSDL), which has been among those that won a permit from RBI, is already offering an electronic insurance account where one can keep all insurance policies in a single account.
“Once our payments bank became operational, it will enable our customers to make their premium payment directly from their bank accounts,” MD and Chief Executive Nageshwar Rao said.