The bank tied up with Life Insurance Corporation of India (LIC) for proving similar insurance on housing loans.
J P Dua, executive director of Allahabad Bank, said the bank was also planning to enter similar tie-up arrangements with insurance companies for education and automobile loans.
For education loan, the bank was planning to tie-up with Kotak Mahindra Insurance Company, hinted Dua.
About 31 per cent of home loan borrowers in the bank have opted for insurance cover, said Dua.
Joydeep Roy, chief distribution officer, Tata AIG, said, "Customers would be offered reducing term life insurance designed to cover mortgage loan obligation of the insured member against death during the term of the coverage."
Under the agreement, the bank would extend Tata AIG's housing loan cover through its network of 2,154 branches across the country.
The bank was planning to open 115 more branches by December 2008. Next year, the bank aimed to open 150 branches, subject to approval by the Reserve Bank of India (RBI).
Dua said Allahabad Bank had headroom to raise up to Rs 2,000 crore this fiscal. It would stress on retail banking, for which it would open six retail malls for marketing retail products.
Last year, the bank had a non-interest income of Rs 10 crore and aimed to double it this year. Insurance cover will be optional for borrowers, and would be extended to new as well as existing customers of the bank.
Tata AIG would, in case of an unfortunate event like death of the mortgage loan borrower, provide for repayment of the housing loan.
The family would get back the property. Dua said the mortgage insurance would help customers.
