Hsbc In Talks With Fis For Insurance Venture

HSBC India is in talks with financial institutions as part of its plans to set up an insurance subsidiary in India along with a joint venture partner.

Last week, the Insurance Regulatory and Development Authority (IRDA) chairman N Rangachary told bankers that banks would not be granted a licence to act as insurance brokers unless they go through the subsidiary route.

HSBC is the first bank to have indicated its plans for setting up a brokerage arm. However, as per the cap on foreign holding for brokers at 26 per cent, HSBC is forced to scout for an Indian partner to take up the balance 74 per cent holding.

 

HSBC India deputy chief executive Christopher Hothersall said: "Negotiations and discussions are on with a number of financial institutions for setting up a joint venture subsidiary." He declined to name prospective partners.

HSBC India already has a corporate agency agreement with Tata AIG for both life and non-life insurance through its subsidiary HSBC Insurance Services Ltd, said Hothersall.

HSBC India is looking at increasing its retail book from the present 25 per cent of its entire portfolio to 50 per cent in the next five years. It has set out a road map, which identifies increasing the branch network from the present 31 to 50 in the next two years. The bank intends to strength its presence in the western region, and also expand more in the south.

HSBC will shortly open branches in Jaipur and Ludhiana. Recently it opened two branches at Coimbatore and Noida (Uttar Pradesh), taking the total to 31. The bank has applied for nine more branch licences.

Meanwhile, HSBC today introduced internet banking for its corporate and small and medium enterprise (SME) customers in the country. HSBC country head (corporate and institutional banking) Pranam Wahi said the internet banking proposition was SME focused. The SME customer base was expected to grow by 25 per cent at 25,000 by end of this calendar year.