Ubi Aims At Rs 100 Crore Risk Products Sales

Union Bank of India has targeted an additional turnover of Rs 100 crore from the distribution of risk products of The New India Assurance Company Ltd.

Union Bank today signed a memorandum of understanding (MoU) with the state-owned insurer to act as its corporate agent in the distribution non-life insurance products to its borrowers.

The bank has already tied up for the distribution of life insurance products of HDFC-Standard Life Insurance Company.

Both the tie-ups are subject to clearance of the corporate agency regulations by the Raja Sabha for allowing banks to distribute insurance products.

Union Bank will target its captive borrowers and sell them various risk products including fire and loss of profit covers on their fixed assets.

 

"We will be able to offer credit and insurance cover under a single roof," said the bank's chairman and managing director V Leeladhar.

New India is open to pick up shares of Union Bank when it comes out with its initial public offering in the third week of August.

The bank is coming out with a Rs 180-crore public issue, which will bring down the government holding from 100 per cent to 40 per cent. "We are looking at a premium in the price band of Rs 15-18," said Leeladhar.

The tie up with Union Bank will not be exclusive in nature since New India has already entered into an MoU with Corporation Bank. "We are providing training to our corporate agents including officials from Corporation Bank, ECGC, Stock Holding Corporation and now Union Bank," said New India CMD R Beri.

The insurance company is initially looking at tie-ups with public sector banks before it signs up with private sector banks.

New India also hopes to distribute its Credit Shield product through the banks. "We expect to improve the business income from this product to Rs 20-25 crore this fiscal as compared to Rs 5 crore worth of premium business mopped up last year," said Beri.