Indian Bank to pick up stake in PNB Principal

Indian Bank plans to pick up a stake in PNB Principal Insurance Advisory, an insurance broking company promoted by four institutions, so as to increase its fee-based income.

K C Chakrabarthy, chairman and managing director, Indian Bank, told Business Standard that the bank has filed an application with the Reserve Bank of India to take a nominal stake and is awaiting the nod from the apex bank.

The investment to set up an insurance broking firm is less than Rs 1 crore and, therefore, will not entail any large investment from the part of the Chennai-based bank to take a stake in the PNB Principal Insurance Advisory Services.

He pointed out that the bank's tie-up with the insurance broking firm will enable customers to access a wider gamut of products of different insurance companies, which is limited to products of only two companies at present.

Currently, the bank has corporate agency tie-up with United India Insurance on the general insurance front and HDFC Standard Life for life insurance. Indian Bank is likely to pick up a nominal stake of the Punjab National Bank in the broking firm.

Punjab National Bank holds the majority share of 30 per cent while Principal Group holds 26 per cent, Berger Paints India Ltd 25 per cent and Vijay Bank 19 per cent in PNB Principal Insurance Advisory. PNB Principal Insurance Advisory took over the Avani Insurance Services broking company last year.