Mumbai: Public sector lender Union Bank of India (UBI) plans to launch its first life insurance product in April 2008.
“We expect to come with the first product in early next fiscal. We are awaiting the approval from the Insurance Regulatory and Development Authority (IRDA), which is expected within the next 3-4 months,” Union Bank chairman and managing director M V Nair told PTI here.
The bank had floated an insurance joint venture with Bank of India (BoI) and Japanese insurance firm Dai-Ichi early this month. Bank of India is the major stakeholder (51%) in the JV, while Dai-Ichi holds 26%.
UBI’s stake, which is 23% at present, will increase to 26% in due course, Nair said.
“BoI will reduce its stake to 48%. Our shareholding will then go up to 26% from the current 23% in the next few months,” he said, adding that the bank has, however, have set no time-frame for enhancing stake.
UBI also plans to foray into the mutual funds market in the first half of FY08, for which it is on the look-out for a foreign partner, Nair said.
The bank’s entry into the life insurance market is likely to intensify the competition among the players.
UBI has a total strength of 2,280 branches.
“In the first phase, around 800 branches of UBI will be used for the distribution of the insurance products and this number will be increased in due course,” Nair said.
Dai-Ichi is among the top ten life insurance companies of the world and will provide its expertise in asset management skills and operational capabilities for the JV’s growth, Nair added.