Bank of Baroda to enter Insurance Business

Bank of Baroda is the country’s third largest public sector lender and in the realm of finance world, the latest news about this bank is its latest venture with the UK- based Legal and General Group. On 16th august the bank declared in New Delhi that it expected to commence operations towards this venture in the next seven months, as stated to PTI. There are already around 21 players in the life insurance sector, with the latest being Star Union Dai-ichi Life which started its operations in February this year.

Together the total numbers of customers in both the banks are over four crores and they could be targeted to remain captive client for the proposed insurance business too. With network of about 4,000 branches across the country (taking both the banks together), It was rightly stated by Mr Mallya that there is a huge opportunity and potential in this sector waiting to be tapped and they intend to do just the same with the help of extensive reach of Bank of Baroda and keeping in mind that insurance has real low penetration in the country which leaves lot of scope open.

The venture was formed in November 2007 and is three way; it is expected to have initial paid up capital of Rs 200 crores and will be shared among partners as follows: The lead partner is BoB who is entitled to receive a share of 44 percent in the venture, followed by Andhra Bank which is domestic partner and entitled to hold a share of 30 percent. The British insurance firm will thus hold the remaining 26 percent share.

Providing further update on recruitment for the venture, Mr Mallya informed everyone to have appointed Mr P Nadagopal who is the former CEO of Reliance Life and has asked him to be the head of the venture. Mr Mallya did not notify of other appointments and just stated that the other senior-level appointment would be done in due course of time.