Bank of Maharashtra (BoM) has opted out of the proposed general insurance joint venture (JV) with Shriram Financial Services and South Africa’s Sanlam due to differences. The Pune-based public sector bank was to have 15 per cent stake in the general insurance entity.
“The terms of the joint venture could not be finalised as per our requirement and hence we have opted out of the JV”, BoM chairman and managing director M D Mallya said.
The bank had announced its intention to collaborate with Shriram and Sanlam for the insurance business in December 2006.
The paid-up capital of the general insurance JV is Rs 105 crore. Now, with BoM opting out, the Chennai-based Shriram Financial will hold 74 per cent stake while Sanlam will have 26 per cent in the JV, a top Shriram Finance group official said. Sanlam and Shriram are partners in , a two-year-old life insurance company.
Their proposed general insurance company has already received R2 licence (clearance of business plans) from the Insurance Regulatory and Development Authority of India (Irda). Meanwhile, Bank of Maharashtra has decided to enter corporate agency arrangement with Export Credit Guarantee Corporation of India (ECGC) for distribution of ECGC policies. These policies offer insurance cover to the exporters.
The bank also has agency arrangement with United India Insurance for non-life and Life Insurance Corporation of India for life businesses.
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