State Bank of India (SBI) may tie up with GE Caps for its insurance venture out of the three shortlisted overseas players : Cardiff, Fortis and GE Caps. "GE Caps has a slight ehas a slight edge over the other two entities since SBI has already had a tie up with GE Caps for the credit card venture," said a source.
SBI is in the final stages of approving its insurance partner. It is likely to make the announcement by the end of this month and after the finalisation of the partner it will move the Insurance Regulatory and Development Authority (IRDA). The bank has hired JP Morgan as its consultant to identify partners for its insurance venture.
The capital of this proposed company is slated to be more than the requisite Rs 100 crore. The combination of the SBI and its seven associate banks will be a formidable force in selling the insurance products across the counters of its 9000 and odd branches.
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Seven multinationals had made presentations for this proposed partnership with the country's largest bank. While SBI officials are not willing to comment on the insurance JV partner, sources said GE Caps stands a better chance in getting the nod as it already has a tie up with SBI for its credit card business. GE Caps has a 40 per cent stake in the company for the marketing of the cards and a 60 per cent stake in the company for the processing of the cards.
SBI is the only bank to have received a clearance from the Reserve Bank of India (RBI) to hold a 74 per cent stake in the planned insurance JV for the life insurance business.
Though the guidelines for banks' entry into insurance specifies that no bank would be allowed to hold more than 50 per cent equity in the insurance outfit, the RBI has madse an exception to the SBI which has been allowed to hold a larger stake in the subsidiary.