MSIG, Manulife and Ergo are hunting for public sector banks to enhance their fee-based income as cushion from crisis.
A host of foreign insurance companies that are waiting in the wings to enter the growing Indian market are courting public sector banks such as Punjab National Bank, Allahabad Bank, Syndicate Bank and Vijaya Bank to get a ready customer base, senior bankers said. Banks are looking at various ways by which they can enhance their fee-based income to ensure that they are adequately cushioned for any crisis, a public sector bank chairman said on the condition of anonymity. "Insurance is one area which all PSBs have identified to expand business and raise fee-based income."
Apart from strong regulatory framework, most banks were able to cash in on their non-core incomes during the peak of the global financial crisis.
"This is one way to spread your risk and we are looking at it," said a senior executive of another PSU (public sector undertaking) bank.
While the entry of new players in the life insurance space had slowed down in the last couple of years due to ambiguity in regulations, action is picking up. Japanese insurer major Mitsui Sumitomo Insurance Group (MSIG), Canada-based Manulife and German insurer Ergo are already scouting for partners.
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