Banks are at their own liberty to assess the insurance broking opportunity, the Indian Banks’ Association (IBA) has said. The IBA’s stance comes in wake of a letter from the finance ministry, addressed to chief executives of all public sector banks, asking them to consider becoming insurance brokers.

“Each bank is in a different arrangement with insurance companies. Some may be in a joint venture, while others may simply be corporate agents. So, a thumb rule cannot be applied to the situation. Each bank board is discussing in detail on how to take this forward,” said MV Tanksale, chief executive, IBA.

Bank chiefs had received a letter from the finance ministry indicating that state-owned banks, keeping in mind the spirit of the budget announcement, are requested to become insurance brokers, within the framework as set up by Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority (Irda). They needed to shift from a corporate agent arrangement to a broker model by January 15, while compliance and progress were to be reported by January 31.