The Reserve Bank of India (RBI) on Thursday said banks will be allowed to offer insurance brokerage services by setting up a subsidiary or through a joint venture if they meet certain conditions.
According to the RBI, banks are not allowed to undertake insurance business with risk participation departmentally and may do so only through a subsidiary or joint venture set up for that purpose. For undertaking insurance business with risk participation, banks should have a net worth of not less than Rs 1,000 crore and a capital to risk (weighted) assets ratio (CRAR) of not less than 10 per cent. The level of net non-performing assets should not be more than 3 per cent and the bank should have made a profit for the last three years.
After unveiling the draft norms for banks’ entry into insurance broking a year ago, the RBI was facing opposition from public sector banks. As there were differences of opinion within the RBI, the proposal was stuck for some time.
Inflation expectations declining: RBI Survey
MUMBAI: A RBI survey has said inflation expectations have declined in the country.
Analysts said this is possibly a factor that could have prompted the RBI to go for a repo rate cut on Thursday.
“Qualitative response from survey suggests that fewer respondents are expecting general prices to rise by ‘more than current rate’ during the next 3 months and next year, possibly reflecting adaptive response to the decline in headline inflation in recent months,” said RBI’s ‘Inflation Expectations Survey of Households: December 2014.’ ENS