Punjab National Bank has set up a committee to evaluate the prospects of entering the life insurance business after its earlier attempt to enter the sector along with US-based Principal fell through.
"The board of the bank has set up a board committee to decide on the (life insurance) business... We are now free to go ahead... Once the board committee decides, which may take another 2-3 months," Punjab National Bank Executive Director M V Tanksale told PTI.
"We will come out with document thereafter. We will have a definite business plan what way we should drive our insurance business," he said, adding that the board would take a comprehensive look at the various opportunities in the sector.
Last month, the bank decided to part ways with two of its partners in a planned life insurance joint venture. It was decided that PNB will buy the entire 26 per cent stake held by Principal Financial Group and 32 per cent participating interest of domestic firm UK (Berger) Paints in Principal PNB Life Insurance Company.
PNB's stake currently stands at 30 per cent in the proposed joint venture, while the remaining 12 per cent is with Vijaya Bank.
Post-regulatory approval, the stake of PNB in the venture would go up to 88 per cent.
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Principal PNB Life Insurance was incorporated in 2005 with an authorised capital of Rs 110 crore to commence the life insurance business.
The paid-up capital of the company stood at Rs 2 crore and PNB's stake is Rs 0.6 crore. For picking up the 58 per cent stake held by Principal and Berger, PNB will have to shell out 1.16 crore.
Meanwhile, PNB posted a 28 per cent jump in net profit to Rs 1,068 crore for the June quarter compared to Rs 832 crore in the same quarter of the previous fiscal.
Total income during the quarter grew by 11 per cent to Rs 6,863.38 crore against Rs 6,177.59 crore in the same period previous fiscal.
The NII of the bank rose by 45.4 per cent to Rs 2,618.5 crore. At the same time, net interest margin (NIM) improved to 3.94 per cent from 3.24 per cent.
However, treasury income declined to Rs 121.11 crore from Rs 358.47 crore in the same quarter of the previous fiscal.
Total business crossed Rs 4.52 lakh crore at the end of June. At the same time, deposits rose by 16.6 per cent to Rs 2,18,960 crore, while advances jumped by 24.6 per cent to Rs 1,57,979 crore.