Indian Bank is moving ahead with plans to enter the life insurance and asset management businesses as part of its wider growth strategy. The public sector lender will seek board approval for the proposed ventures before starting discussions with potential partners and approaching regulators, Managing Director and CEO Binod Kumar said.
The bank is also expanding its international presence. It plans to open a representative office in Dubai and is studying possible opportunities in Malaysia and Indonesia.
Indian Bank's proposed entry into life insurance and asset management remains on schedule, Kumar told PTI. The lender is considering whether to establish subsidiaries or joint ventures for the two businesses.
“It is very much on track. We are in the process of seeking board approval and thereafter initiating other relevant regulatory and administrative processes,” Kumar said.
Once the board clears the proposals, Indian Bank will begin the next stage, including selecting partners and completing regulatory requirements. According to Kumar, finding the right partner will remain one of the main steps before the bank starts operations in the new businesses.
“It will take time, say one year or so. Identifying a good partner is the most essential part of that. If you have a good partner, wealth creation is faster,” he said.
Kumar said subsidiaries and joint ventures can help financial institutions create new revenue sources while building their brands in other parts of the financial services market.
Indian Bank already has exposure to the insurance sector through its 28.52% stake in Universal Sompo General Insurance Company. The stake became part of Indian Bank after Allahabad Bank merged with the lender in 2020.
Universal Sompo General Insurance began operations in 2007 as a joint venture involving several Indian financial institutions and companies. Indian Bank currently owns 28.52%, while Indian Overseas Bank holds 18.06% and Karnataka Bank owns 6%.
Dabur Investment Corp holds a 12.81% stake. Japan-based Sompo Japan Insurance Inc is the largest shareholder with a 34.61% holding.
However, the proposed life insurance business would expand Indian Bank's presence into another part of the insurance market. Its planned asset management venture would also allow the bank to enter the investment management business after receiving the required approvals.
Indian Bank did not announce potential partners for either venture. Kumar said the process may take about a year as the lender evaluates its options and completes the required steps.
Indian Bank is also working to increase its overseas presence. Kumar said the lender plans to open a representative office in Dubai to tap business linked to the large Indian community living and working across West Asia.
“My aim now is to open a rep office in Dubai,” Kumar said, adding that the bank sees business opportunities from non-resident Indians in the region.
The bank's board has already approved the Dubai representative office. Indian Bank is now seeking the remaining regulatory clearances before it can start operations there.
Indian Bank currently operates a full-service international branch in Singapore and branches in Colombo and Jaffna in Sri Lanka. It also runs an IFSC Banking Unit at GIFT City in Gandhinagar, which functions as an offshore branch.
“We are getting good business from our GIFT City branch, including participation in various syndicated loans,” Kumar said.
Along with Dubai, Indian Bank is studying possible expansion into Malaysia and Indonesia. The lender has not provided a timeline or operating model for entering those two markets.