Canara HSBC Oriental Bank, Life Insurance, double capital base

Buoyed by growing potential of insurance industry in India, the Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited plans to double its current capital base of Rs 525 crore by 2010.
 
“We are buoyed by the clear potential of the (insurance) market. We plan to double the current capital base of Rs 525 crore within a year,” the Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited, Chairman, A C Mahajan told newspersons here.

The Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited—a joint between two of country’s leading public sector banks Canara Bank and the Oriental Bank of Commerce and HSBC Insurance (Asia Pacific) Holdings Limited— started its operations in June last year  with an initial capital base of Rs 325 crore.

Investment plan

“The company’s three shareholders will be infusing more capital in the current fiscal to support the growth,” Mahajan, who is also the Chairman and Managing Director of Canara Bank said.

“The Government has given clear indications for carrying out more reforms in the insurance sector. This will encourage infusion of more funds,” he said. Talking about the performance of the newly floated insurance company, HSBC India Country Head, Naina Lal Kidwai said as per the latest IRDA data in less than one year of operation Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited had been ranked ninth amongst 21 private players in terms of market share.

“We have collected an impressive premium of Rs 374.9 crore between June 2008 and May this year by selling policies to more than 43,000 custoemrs,” Kidwai said. Canara Bank and the Oriental Bank of Commerce will more than double their distribution capacity this fiscal by increasing their Specified Persons licensed by the IRDA to sell insurance products from existing 579 to over 1300, Mahajan said.

CanBank to cut interest

Canara Bank on Tuesday said it will take a view on slashing interest rates by the end of this month.

“Rates are going southward. Rates are expected to come down,” Mahajan told reporters .Asset Liability Committee (ALCO) is meeting at the end of this month, he said, adding, “the bank will take appropriate decision.” However, he remained non-committal on the quantum of the revision. Unless cost of funds come down and yield on advances moderates, the lending rates could not ease further, he said.

The bank has already reduced Prime Lending Rate (PLR) to 12 per cent effective April, he said. “We are paying interest rates according to the needs of the bank, liquidity in the market and also to ensure that the bank always remains liquid,” he added. Yesterday, State Bank of India, the country’s largest lender, reduced deposit rates across all maturities by 0.25 per cent.