PNB, Vijaya Bank to seek RBI nod for insurance foray

New Delhi, Jan 4: Punjab National Bank and Vijaya Bank are scouting for a fourth partner for insurance ventures with the Swiss insurer Zurich and will shortly submit a fresh application to the Reserve Bank of India (RBI).

"Zurich, PNB and Vijaya Bank are searching for a new partner. It may be another corporate," official sources told PTI, but declined to name the companies shortlisted.

The move comes after the Delhi-based Hero group pulled out of the venture in the last minute. The group was supposed to hold 51 per cent while Zurich decided to take 26 per cent, PNB 15 per cent and Vijaya Bank 8 per cent.

PNB and Vijaya Bank had earlier obtained RBI approval for foraying into life and non-life insurance promoted by Hero group with 51 per cent stake.

But after Hero group’s reversal of plans, the two banks will have to submit application to the apex bank afresh. "We will apply to RBI shortly after finalising the fourth partner," bank sources said.

PNB, Vijaya Bank, Bank of Baroda and Allahabad Bank had initially decided to venture into insurance with a foreign partner but wrangle over management control broke the proposed alliance. While Bank of Baroda has decided to go on its own, RBI did not grant permission to Allahabad Bank.

RBI has been selective in granting permission to banks. State Bank of India is the only PSU bank to get RBI approval. Vysya Bank and Jammu & Kashmir Bank are the two other private sector banks to get RBI approval. RBI had maintained its reservations on granting permission to banks having too many loss making subsidiaries. The bank had also set stringent parameters which was required to be met by the banks eager to foray into insurance.

— PTI