Corp Bank plans non-life JV, credit card firm

Public sector lender Corporation Bank has decided to foray into the non-life insurance business and has initiated talks with a foreign player for a joint venture (JV), where a third partner is proposed to be roped in. It is also weighing the prospects of setting up an asset management company and roping in a partner for the wealth insurance business.

In addition, the bank is expected to set up a company to jointly manage the credit card operations with Life Insurance Corporation, which holds a 26.32 per cent stake in Corporation Bank. While the two public sector players are yet to set up a separate firm for the credit card business, Corporation Bank is issuing the card and servicing the clients for the last 3 months.

“Ultimately, the understanding is to have a separate company. But LIC wants to have a base of around 100,000 card holders before we set up a separate company. We may also become a part of it,” Corporation Bank CMD J M Garg told Business Standard in an interview. The company could, however, be two years away, as LIC is looking to have a base of around 50,000 cards by the end of the current financial year.

While GE, which is a shareholder in SBI Card, was to be the third shareholder in the credit card venture, Garg indicated that the US financial services company was no longer in the reckoning. With LIC being a shareholder, Corporation Bank is unable to set up a separate life insurance venture. However, Garg said that it has initiated the process to set up a general insurance company, which would target the bank’s client base.