BoB to foray into life insurance

The state-owned Bank of Baroda has finally woken up to the need of a greater focus on non-banking income...

The state-owned Bank of Baroda (BoB) has finally woken up to the need of a greater focus on non-banking income and has decided to foray into the life insurance business with a European partner.

“We are talking to some shortlisted European insurance companies and will finalise the joint venture partner by April end”, Bank of Baroda chairman and managing director Anil K. Khandelwal said.

The foreign partner will have 26 per cent stake in the joint venture life insurance company, he said adding, “we will sign an MoU with the foreign partner soon after we finalise the name.”

Given the low penetration of insurance in the country and extensive reach of Bank of Baroda, he said, “there is a huge opportunity in this sector, which we want to tap.” Bank of Baroda’s plans to enter the insurance sector was cleared by its board in September 2006.

Talking about BoB Pioneer, an asset management company formed recently in partnership with Milan-based Pioneer Global Asset Management company, Khandelwal said, “The joint venture will start business by the end of 2007.” BoB has signed an MoU with the Pioneer Global AMC last month and is in the process of obtaining necessary regulatory clearances, he said.

“With the strength of a global player and its successful experience in working with large banking networks, we will leverage on our joint expertise in building a leading asset management platform in India,” he said. BoB Mutual Fund has Rs 131.8 crore of assets under management (AUM) as on February.