Canara, OBC, HSBC plan life insurance biz

Looking to derive strength from their huge customer base and branch network, two PSU lenders - Canara Bank and Oriental Bank of Commerce - along with the insurance arm of UK-based HSBC Group are likely to start a life insurance venture in the next four months.

The venture will have an initial paid-up capital of Rs 200 crore besides Rs 125 crore premium HSBC Insurance (Asia-Pacific) will pay to take 26% stake in the venture.

While the majority stake holder Canara Bank, with 51% share, will invest Rs 102 crore, OBC will contribute Rs 46 crore and HSBC will invest a total of Rs 170 crore.

"The R1 (preliminary approval) stage from IRDA is clear. IRDA is currently looking at the R2 application. I think the joint venture will be able to launch its first policy by May-June," Allen C A Pereira, executive director, OBC, told PTI.

The new life insurance entity will have exclusive access to customer bases of both the state-owned banks and HSBC in India. Canara Bank and OBC have over 40 million customers and a nationwide network of 3,600 branches.