Canara, HSBC and Oriental in JV on insurance

Canara Bank, HSBC Insurance (Asia-Pacific) Holdings Ltd and Oriental Bank of Commerce have signed a formal agreement to jointly establish a life insurance company in India by the name Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.
Canara Bank, HSBC and Oriental Bank will hold 51 per cent, 26 per cent and 23 per cent stakes respectively in the new company. The new life insurance company will be capitalised at Rs 325 crores. HSBC, Canara Bank and Oriental Bank will contribute Rs 177 crores, Rs 102 crores and Rs 46 crores respectively.
Canara Bank chairman and MD M.B.N. Rao said, "The current insurance penetration in India is as low as five per cent of the country’s GDP. We are in a strong position to improve this figure since Canara Bank enjoys a wide network of branches and vast clientele base in India. The new company aims to introduce a variety of insurance products fulfilling the needs of the entire spectrum of people right from the high networth individuals to the farmers residing across rural belts of the country. We have also planned to offer micro insurance services for rural as well as the semi-urban population of India."
Oriental Bank of Commerce chairman and MD Alok K. Misra said, "Factors like low penetration of life insurance policies, a growing need for old age security, strong GDP growth and the steep rise in the savings rates in India indicate that the proposed new company is bound to reap the benefits emerging from this unique opportunity by offering tailor-made insurance products at very competitive prices. Oriental Bank of Commerce has already groomed a strong workforce of 900 employees to support the bank’s insurance business through its 1,380 core banking service outlets across the country." "CAGR from $16 billion currently to $60 billion within the span of three years," Mr Arya added.