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IDBI,
Federal Bank and Fortis in life insurance joint venture
13
July 2006
 Mumbai:
IDBI, Federal Bank and Europe's €35-billion banking
and insurance conglomerate Fortis have signed a memorandum
of understanding (MoU) for setting up a life insurance
company in India.
IDBI
and Fortis were looking for a third partner for their
life insurance business in India and have jointly identified
Federal Bank for it. IDBI will initially own 48 per cent
in the proposed life insurance venture while Fortis and
Federal Bank will hold 26 per cent each.
"We
are very glad to enter into a joint venture with IDBI
and Fortis to start a life insurance company. Federal
Bank, with a spread and reach to every nook and corner
of Kerala and to all major urban /metro centers of the
country, has a wide distribution network and a vast customer
base. Our aim is to convert ourselves into a financial
super market with an array of financial products on our
shelves for our customers to choose from, in addition
to our present banking products and services. The new
joint venture will enable us to offer a wide range of
insurance products to our customers and to extend our
customer base. The synergy between IDBI Bank and Federal
Bank - the two Indian Banks - and Fortis with its vast
expertise in the insurance business is expected to enrich
the Indian insurance market," said M Venugopal, chairman
of Federal Bank.
For
IDBI, a foray into the life insurance business will complement
the range of financial products and services being offered
to its clientele and is consonant with its vision statement
of being a financial conglomerate, said chairman V P Shetty.
Federal
Bank is one of the successful private sector banks having
a good retail distribution reach and loyal customer base
in India and abroad and will complement IDBI's growing
distribution network, he said.
Fortis,
one of the largest players in the insurance business in
Europe and has successful joint ventures in various Asian
countries.
The
Indian partners have successfully pursued the bancassurance
model for distribution of insurance products and hopes
to add value to market-friendly products of Fortis. Together,
they hope to be in a unique position to develop and operate
the bancassurance model further, which will augment the
activities of IDBI and Federal Bank.
The
partners will jointly approach the regulators for obtaining
the necessary statutory and regulatory approvals.
"This
transaction is fully in line with our carefully planned
expansion strategy announced last year. This is a unique
opportunity for Fortis to start insurance operations in
India, which is rapidly becoming one of the largest insurance
markets in the world. We are very happy to team up with
Federal Bank in the partnership we have created with IDBI,"
said Peer van Harten, CEO of Fortis Insurance International.
Industrial
Development Bank of India (IDBI) is a scheduled bank incorporated
and registered under the Companies Act, 1956, having its
registered office at Mumbai, India. IDBI enjoys the status
of a public financial institution and is also categorised
under a new sub-group `Other Public Sector Banks', with
the government of India holding 52.68 per cent of the
issued capital.
IDBI
has a network of 181 branches, four extension counters
and 396 ATMs in 103 centres. The bank provides a wide
range of products and services in the financial sector
to both retail and corporate clientele. The range of diversified
services includes, amongst others, project financing,
term lending, working capital facilities, lease finance,
venture capital, loan syndication, corporate advisory
services, legal and technical advisory services, etc.
to its corporate clients as well as mortgage loan and
personal loan to its retail clients.
As
part of IDBI's development activities, IDBI has been instrumental
in sponsoring and supporting the development of key institutions
involved in India's financial sector. IDBI has played
a key role in the formation of Securities and Exchange
Board of India (SEBI). It has also sponsored the National
Stock Exchange of India Limited (NSE), which first introduced
electronic trading in securities in India.
Incorporated
and registered under the Travancore Companies Act, 1931
and licensed under the Banking Companies Act, 1959, Federal
Bank became a scheduled commercial bank in 1970. The bank
has its registered office at Alwaye in Kerala. It has
no dominant promoter group and its shares are traded on
the BSE, NSE and the Cochin Stock Exchange. Federal Bank
also has a GDR issue listed on the London Stock Exchange.
With
472 branches, 329 ATMs, four million retail customers
and over 6,300 employees, the bank provides a wide variety
of financial products and offers automated and inter-branch
banking facilities. It was also among the first India
to offer internet banking through Fednet and perhaps the
only one to have introduced an e-payment gateway and mobile
banking and alert system.
Federal
Bank services a large non-resident Indian population and
has a long-term relationship with NRIs. Federal Bank reported
total deposits of Rs17,900 crore, net worth of Rs1,238
crore and net profit of Rs 225crore for the year ended
March 2006.
Fortis,
a €35-billion company, engaged in banking and insurance,
offers personal, business and institutional customers
a  comprehensive
package of products and services through its own channels
and through other distribution partners. Fortis ranks
among the 20 largest financial institutions in Europe.
Other
reports on IDBI Bank
Other
reports on Federal Bank
General
reports on Insurance
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