JVs Flourish With Mutual Respect: Insurance Official

Mumbai, November 27: | Updated: Nov 28 2002, 05:30am hrs
Consolidation and global standards of service are bringing organisations together in the country either in form of joint ventures, mergers or acquisitions. In order to access expertise and funds many in the Indian financial services sectors are teaming up with international players.

"A JV is not a handshake, its an arranged marriage, and a JV can be successful if both the partners respect what the other player gets to the table," said Max New York Life Insurance Co Ltds head of marketing, Debashis Sarkar speaking at Bank.net- 4th International Exhibition and Conference organised by Exhibitions India Pvt Ltd.

"In our case, the partnership has been successful because of mutual respect and has resulted in an organisation with financial strength, expertise and integrity," Mr Sarkar added.

Mr Sarkar also mentioned that the JV can have four focuses or driving factors namely customer focus, product focus in terms of technical tie-ups, financial focus in terms of capital and legal focus for meeting the countrys rules and regulations.

"However, successful JVs must realise that customers are the key stakeholders and hence should be customer oriented," Mr Sarkar added.

Speaking at the session on mergers and acquisitions, Bharat S Raut & Cos partner Sudhir Kapadia said that a merger or an acquisition has become a key growth strategy in the financial services world due to increasing globalisation and consolidation. Any merger or acquisition should benefit the shareholders in two ways; value capture which is an immediate phenomenon and value creation in the long run.

Mr Kapadia also said that in order to give impetus to mergers and acquisitions in the banking sector, the government will have to make certain changes in rules and regulations. And mergers involving foreign banks would have to be made tax-neutral as it is in the case of Indian banks.

The 49 per cent cap on foreign holding in banks will also have to go, and the government would have to lend clarity on the issue of investments by foreign institutional investors in India banks.