Canara, HSBC, Oriental to set up life insurance firm

Chennai, Sep 10 (UNI) Canara Bank, HSBC Insurance (Asia-Pacific) Holdings Limited and Oriental Bank of Commerce have signed an agreement to jointly establish a life insurance company in India.

The new company christened Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited will have access to over 40 million customers and a formidable nationwide distribution network of 3,600 branches throughout India, a release here said today.

While both Canara Bank and Oriental Bank of Commerce offer an extensive client base, complementary distribution networks and broad local market knowledge, HSBC brings in considerable insurance experience, product range and proven bancassurance capabilities.

Under the proposed agreement, Canara Bank would take a 51 per cent stake in the new company, HSBC a 26 per cent stake and Oriental Bank of Commerce, the remaining 23 per cent.

The new life insurance company would be capitalised at INR3, 250 million (approximately US dollar 80 million), of which HSBC would contribute approximately US Dollar 43.6 million, Canara Bank US Dollar 25.1 million and Oriental Bank of Commerce US Dollar 11.3 million.

Under the terms of the agreement, HSBC would provide a range of management services, which include nominating executives for certain senior roles, the release added.

UNI