Canara to pick risk partner soon

Canara Bank is all set to foray into life insurance venture in partnership with a foreign player within the current financial year.

M B N Rao, chairman and managing director, Canara Bank said, "We have initiated discussion with few potential partners, which includes foreign ones and two Indian banks. It could either be a consortium of Indian banks with a foreign player or only Canara Bank with a foreign partner." Partners for the insurance foray are likely to be finalised in three months, Rao confirmed.

Initially, the capital base would be Rs 100 crore as per the statutory requirement, Rao said. Once the partner is finalised, Canara Bank would seek Reserve Bank of India (RBI) and Insurance Regulatory and Development Authority (IRDA) approval for the venture, he noted. Rao hoped all the insurance company would be floated before the end of the current financial year.

Meanwhile, the bank was also discussing with three foreign asset management companies (AMCs) for strategic tie-ups in its 100 per cent subsidiary "� Canbank Investment Management Services Ltd.

"We are willing to tie up with a foreign AMC. We may offload stake in our asset management subsidiary, but will maintain majority stake," Rao said, adding "the deal could be finalised in three months".

The bank was also eager to enter the broking business through its other subsidiary, Gilt Securities Trading Corporation Ltd. Canara Bank will be raising Rs 3,000 crore by December 2006.

"We are exploring all possibilities including follow-on public issue, hybrid Tier I and Tier II capital to raise Rs 3,000 crore by December, 2006," he added.

The bank which recorded a 24.81 per cent growth in total business at Rs 1,96,229 crore was eyeing more than 18 per cent growth during 2006-07.

The bank was targeting more than 18 per cent growth in deposit at Rs 1,38,000 crore and 19.560 per cent growth in advances at Rs 95,000 crore during 2006-07, Rao added.

The bank was expecting to open 10 overseas branches over the next two years in the West Asia, South East Asia and North America.