Punjab National Bank eager to expand insurance operations

Dissolving JV with Vijaya Bank and Principal Group would enable Punjab National Bank to become more competitive.

PNB's newly appointed chairman & managing director (CMD) KR Kamath says that the bank offers not just the customer base but also branch network and brand for extending insurance services.

"We are in the process of exiting our existing insurance joint venture with Vijaya Bank and Principal Group. Once the process is completed there is no reason why PNB should not look at the huge opportunity available for banks to retail insurance products," he said in a report inEconomic Times.

The JV's business model, it may be recalled, was disallowed the Insurance Regulatory & Development Authority (IRDA) though the latter permitted PNB to offer insurance through the referral route. Under the referral mechanism, PNB can only supply potential business ‘leads’ for the insurance company—LIC in this case to pursue. The JV was to offer both life insurance and non-life insurance products.

PNB's eagerness to have a re-look at insurance comes at a time when many of its peers—State Bank of India or Bank of Baroda or Canara Bank—have floated their life ventures to leverage on a new business model of insurance retailing called bancassurance.