Rural banks to sell life insurance policies
By Venkatchari Jagannathan | 31 Aug 2001
Dabur's joint venture with CGU Life will be retailing life insurance policies through the extensive rural network of the Lakshmi Vilas bank in Tamil Nadu and Andhra Pradesh. The bank, through a letter of intent has offered to act as the corporate agent for the insuance company, the CGU Life.
According to Mr.A. Krishnamoorthy, chief general manager of Lakshmi Vilas Bank, a detailed road map is being prepared for selling insurance and savings instruments. The bank would primarily target self help groups that are active in Tamil Nadu and Andhra Pradesh for selling the life insurance policies.
Simultaneously, the bank has hired ICRA to suggest a new credit appraisal, management and recovery system. "ICRA has completed the diagnosis phase of the credit delivery process and is working on synthesis and migration to a new method," Mr.Krishnamoorthy said
Lakshmi Vilas Bank is targeting a non-performance asset (NPA) level of 5 per cent on net basis and 7 per cent on gross basis. Currently the NPA levels are at 6 per cent and 9 per cent on net and gross basis respectively.
Last fiscal the bank closed its books with a total business of Rs. 3,800 crore and an operating profit of Rs. 60.07 crore and a net profit of Rs. 26.74 crore.