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New Delhi : The Indian insurance joint venture of HSBC Holdings, Europe's biggest bank, will expand its capital by Rs 2 billion this year to meet growing business needs, its partners said.
"All partners are committed to contribute to capital... as and when required," A.C. Mahajan, the chairman of the joint venture and of Indian state-run Canara Bank, which owns 51 per cent in the venture, told a news conference on Tuesday.
HSBC holds 26 per cent and state-run Oriental Bank of Commerce owns the remaining 23 per cent.
India is a traditionally under-insured country, making it a destination for global firms.
The insurance market in the world's second-most populous country stood at around $54 billion, a tiny share compared with the world's $4.06 trillion, according to the 2007/08 annual report of the Indian insurance regulator.
Canara HSBC Oriental Bank of Commerce Life Insurance Co Ltd started operations in June last year with a capital of Rs 5.25 billion, and by the end of March had written Rs 3.75 billion of premiums on a gross basis.
Current rules cap foreign holdings in domestic insurance firms at 26 per cent, but many expect the government to raise the limit to 49 per cent.
HSBC's India head Naina Lal Kidwai declined to answer a question on whether her firm would increase its stake in the joint venture when the rules were relaxed.
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