RBI clears appointment of 'Business Correspondents'
Mumbai: The Reserve Bank of India has allowed banks collect deposits from public and deliver credit to borrowers through agents appointed by them. This is so that banks can reach the rural markets.

In a circular issued to banks on January 25, the RBI has permitted them to appoint business correspondents for undertaking such activities under a scheme through which banks should enter into specific arrangements with business correspondents prescribing suitable limits on cash holding by business correspondents and also limits on individual customer payments and receipts.

The transactions undertaken through business correspondents will be accounted for and will reflect in the bank's book of accounts by the end of the day or the next working day. Any agreements entered into by the correspondents with the customer shall specify that the bank is responsible to the customer for the acts of omission and commission of the correspondent, the circular said.
The business correspondents will be paid commission/fees as per RBI guidelines.

The RBI has also said that the banks should follow know-your customer norms while undertaking banking activities through the business correspondents.
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Aviva Life increases capital by Rs.139-cr
Hyderabad: Aviva Life Insurance has increased its capital base by Rs139 crore, taking the total paid-up capital to Rs459 crore. Aviva currently holds a 26-per cent stake and Dabur 74 per cent. Aviva Life expects the fresh infusion to help fuel the growth plans in 2006.

According to the managing director of Aviva India, Stuart Purdy, "Insurance is a capital-intensive business and the current capital infusion of Rs139 crore will allow us to expand our operations, launch new products and reach out to the target audience."

Aviva Life has recorded a growth of 106 per cent compared to the last year with new business annualised premium equivalent (APE) of Rs314 crore for 2005. The company increased its market share to 5.5 per cent during April-November 2005, against the same period last year. Aviva Life holds seventh position in the Indian life insurance market.
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Birla Sun Life to use automated underwriting software
Mumbai: Birla Sun Life Insurance has started using the Automated Underwriting and Risk Analysis (AURA) software to improve turnaround time and optimise human resource requirements.

Mario Braganza, V-P, client services and underwriting, Birla Sun Life, said the software had helped the company reduce the headcount of its core underwriters by 40 per cent. The software uses key risk factors such as height, weight, body mass index, blood pressure, occupation, family history, life style and medical information to underwrite the policy. It also helps the company issue policies in one-and-a-half days, an improvement from three days earlier.

With the implementation of workflow and imaging by July, the company hopes to reduce the policy issuance time to 30 minutes.
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