Besides a foreign partner, banks are expected to enter the market with one domestic player as overseas insurers' holding was capped at 26 per cent, while banks are permitted to hold a maximum 49 per cent in any insurance JV.
With many private banks having forayed into insurance when the sector was opened up in 2000, the new entrants into the sector, one of the fastest growing financial services, will be mostly from public sector banks. Given the negligible penetration of insurance in India, there is a huge market for insurance companies to tap and more players entering the market is good news for consumers, who would like to choose insurance to suit individual needs.
PNB, has submitted its application to IRDA for licence and expects to get the approval by December-end. It is likely to set up a life insurance joint venture with UK financial major Principal and Vijaya Bank. Bangalore-based Canara Bank is scouting for partners, both foreign and domestic, to foray into the life insurance sector. Mumbai-based Bank of Baroda is in the process of finalising partners for foraying into the life insurance sector and its Board has already identified the foreign partner. Delhi-based Oriental Bank is likely to finalise joint venture partners in a months' time for foraying into the life insurance sector.