Zee Media Bureau
New Delhi: The Reserve Bank on Thursday allowed banks to act as insurance brokers.
The RBI today permitted banks to set up insurance joint ventures on risk participation basis and also to undertake insurance business as agents of insurance companies on fee basis, without any risk participation by banks and their subsidiaries.
With the objective of increasing insurance penetration using the entire network of bank branches, the Finance Minister in the budget speech 2013-14 had announced that banks will be permitted to act as insurance brokers.
Consequent to the announcement, IRDA formulated and notified the IRDA (Licensing of Banks as Insurance Brokers) Regulations, 2013 to enable banks to take up the business of insurance broking departmentally.
Reserve Bank had also issued draft guidelines on entry of banks into insurance business- insurance broking business on November 29, 2013 for public comments. Taking into account the comments received from various stakeholders in response to the draft guidelines, the guidelines have now been finalized.
