 "IRDAI")
Max Life Insurance CEO and managing director Prashant Tripathy has said that approval from the insurance regulator on Axis Bank proposal to raise its stake in the insurer to about 19 per cent should come through within next three months.
Earlier in October, the Reserve Bank of India (RBI) did not approve Axis Bank's proposal to raise its stake up to 29 per cent but scaled it down to an aggregate of 19.02 per cent with the subsidiaries of private sector lenders.
Axis Bank was to originally acquire an additional about 29 per cent stake in Max Life. However, some changes had to be made to the deal following correspondence from the Insurance Regulatory and Development Authority of India (IRDAI).
The bank has shown its willingness to raise its stake directly and through its subsidiary in the Max Life Insurance, Tripathy said.
"This particular transaction in the permissible zone as per the RBI regulation, so it may not require any approval from RBI. It requires approval from IRDAI. We filed for IRDAI's approval about two weeks ago. It is under process. We should get approval in this financial year itself," he told PTI.
Axis Bank currently holds about 1 per cent stake in Max Life and is the biggest banking channel partner for the distribution of the insurer's products. Products sold through the bank reportedly account for 54 per cent of Max Life's revenues.
Axis Bank had said its total stake in Max Life will remain within the limits stipulated under the applicable laws and regulations.
"Under the revised agreements, Axis Bank will acquire up to 9.002 per cent of the equity share capital of Max Life, and Axis Capital Limited and Axis Securities Limited will together acquire up to 3 per cent of the share capital of Max Life.
"In addition, Axis entities will have a right to acquire an additional stake of up to 7 per cent of the equity share capital of Max Life, in one or more tranches, in accordance with existing laws and regulations," the bank had said.
The bank being the promoter of this company is definitely of strategic advantage, he said.
"While the branch network is already available with us, but through this relationship there will be several other elements of governance, joint product development, IT integration, etc will also flourish and develop," he said.
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