Uco Bank to finalise general insurance JV by September

State-run Uco Bank plans to foray into general insurance and the details are to be worked out by September, including the selection of partners, a top official has said.

"We plan to enter general insurance by launching a joint venture. We hope to finalise the JV structure by September," Uco Bank Chairman and Managing Director S K Goel told PTI here.

"A final picture about the company will emerge in 2-3 months. We are currently in talks with potential players to set up the joint venture," Goel said.

Besides the government lender, the JV will have three more partners-- a state-owned bank, a foreign bank and a private general insurance company, he said.

Uco Bank and the other state-owned lender will have a joint shareholding of 49 per cent, he said. Uco Bank's shareholding is likely to be in the range of 28-30 per cent in the JV, the official added.

The private insurer and the foreign bank together will have a stake of 51 per cent in the subsidiary, Goel said, without disclosing the identity of players.

Several leading state-owned lenders, such as the State Bank of India and Union Bank of India, already have insurance subsidiaries in partnership with global players.

Uco Bank will act as a promoter and distribution partner in the business, while it expects the domain expertise from its foreign and private partners, Goel said.

The bank decided to put on hold its plans to launch a financial services subsidiary due to adverse market conditions, he said.

"We had plans to launch a financial services subsidiary. But, with the downturn in financial markets and the fact that credibility of rating have suffered in the recent past, we have decided to put the plan on hold."

The lender had planned to launch the subsidiary with a view to offer a one-stop-shop for financial services such as sale of insurance and mutual fund products, loan syndication and corporate advisory services.

The financial services unit was proposed to be launched in association with a foreign partner, with the state-owned lender holding a 49 per cent stake in the unit and the overseas entity 26 per cent.