Assocham: Rural and semi-urban insurance to contribute $35bn by 2010
New Delhi: An Assocham study on the insurance sector has said that rural and semi-urban life insurance industry is expected to grow to $20bn by 2010, while the non-life business is expected to rise to $15bn. In its study, Assocham said, "Rural and semi-urban India will together contribute $35 billion to the Indian insurance industry by 2010."

Overall, the study says that the Indian insurance business may clock a 500 per cent increase in size by 2010, from its current $10bn to $60bn.

According to the study, India's life insurance premium as a percentage of the GDP is at comparatively low levels, at 1.8 per cent, against 5.2 per cent in the US, 6.5 per cent in the UK and 8 per cent in South Korea.

The study has also warned that in the coming years, the corporate segment will not be a big area of growth for insurance firms.
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Allahabad Bank to float insurance co JV, open branches/offices abroad
Kolkata: Allahabad Bank has received clearance from the RBI to float a joint venture company in the non-life insurance sector, in conjunction with both foreign and Indian partners. "The Bank has already got the approval of the RBI for floating a joint venture company for insurance business by October next," Allahabad Bank chairman and managing director O N Singh said at a press confrerence after Bank's Board meeting in Kolkata.

He said that partners in the joint venture company would be Sampo (Japan), Indian Overseas Bank, Karnataka Bank Ltd and Dabur Limited. The regulatory compliance of the company was being formalized for a final take-off, he added.

The Allahabad Bank has also obtained a licence from the Hong Kong Monetary Authority for opening its first-ever overseas branch in the China administered territory. The opening may occur shortly. According to the chairman, the bank had also received approval from the China Banking Regulatory Commission for opening a representative office in Shenzhen, China. Work on this was now underway. He also said that Allahabad Bank, in coordination with the Punjab National Bank, would open a branch in Kazhakhstan shortly.

Meanwhile, the bank has registered a 24.87 per cent growth in business with the net profit showing a significant 30.33 per cent rise during the last fiscal. Singh said that while its net profit shot up from Rs541.80 crore in 2004-05 to Rs706.13 crore to 2005-06, the Bank's operating profit rose from Rs933 crore to Rs1,024.15 crore in the last fiscal, registering a 9.68 per cent growth.

Gross NPA to gross advances declined to 3.94 per cent as on March 31, 2006, from 5.80 per cent in the corresponding previous year, while net NPA to net advances dropped to 0.84 per cent from 1.28 per cent during the period.

Market share in aggregate deposits also increased to 2.29 per cent as at last March-end from 2.25 per cent in the previous year. The Capital adequacy ratio of the bank had gone up to 13.37 per cent from 12.53 per cent.

About Allahabad Bank's projections for 2006-07, Singh said that it had fixed a business growth rate of 27 per cent, targeting Rs 1 lakh crore by March-end 2007.
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World Bank's assistance programme may get hiked to $3.5bn levels
Hyderabad: The World Bank will hike its assistance programme in India to a level of $3.5bn across various sectors this year. The Bank has begun to provide State budget support loans to Andhra Pradesh and Orissa and is in discussion with four States for new infrastructure projects.

The bank's Lead Energy Specialist, South Asia Energy and Infrastructure, Salman Zaheer, said the Bank's focus shift is in terms of sectors within infrastructure into roads, irrigation and hydel generation.

Speaking on the theme "Power supply — Challenges in efficient delivery," at a World Bank-Press Institute of India Workshop for the media, Zaheer said that India has set a target of adding 60,000 MW of power by the year 2012. If this target were to be achieved, it needs to expedite not just work on new projects but also strengthen the transmission and distribution (T&D) network, while streamlining the functioning of the State Electricity Boards.
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