Idbi Bank Atms To Hawk Tata Aig Plans

Next time you go to an ATM of IDBI Bank, you can do more than banking. The bank is launching 'any time insurance' through its ATM network today. It has tied up with Tata AIG Insurance to offer customers the convenience conducting insurance related-transactions at any time of the day across its 100-odd ATM centres at 43 cities.

This will give Tata AIG a clear advantage in terms of spreading its coverage across the country, especially since IDBI Bank intends to expand its ATM network to 350 centres by the end of the fiscal and add another 40 branches to its present 60 by the year end.

 

The bank proposes to use its ATM network for more than just cash dispensation or balance enquiries. Plans are afoot to capitalise on its expanded presence in the country and offer other investment products including mutual funds and fixed deposits.

However, the bank is yet to finalise talks on the tie-up for sale of mutual fund products, sources said.

"This is a new concept in the country, but is in existence abroad," said a bank official, citing the example of dispensation of Malyasian Airlines tickets through the ATM network of May Bank.

Commenting on the bank's plan, the industry feels that prima facie such a facility can only generate leads for tied agents to follow, and would be more tuned with the sale of non-life products.

Insurance industry officials also pointed out that in the sale of life products, sales through ATMs would go against the actuarial principle of anti-selection. "Experience indicates that those with high risks tend to gravitate more towards this," they said.

There are also legal complications in terms of electronic signature, as this has yet to be introduced in the country. To date, the Life Insurance Corporation of India is using the Internet for payment of premiums through the various payment gateways and banks.

However, it is possible that once bancassurance regulations are finalised, banking products such as auto and home loans of IDBI Bank could offer value-addition with an insurance cover. Marketing of this product has got the approval of the Insurance Regulatory and Development Authority.