Indian banks can now be brokers too

Seeking to increase insurance penetration in the country, the Reserve Bank has allowed banks to act as brokers for insurers, set up their own subsidiaries and also undertake referral services for multiple companies.

The banks have also been allowed to set up subsidiaries and joint venture companies for undertaking insurance business with risk participation, it said.

They can also act as corporate agents without seeking prior approval from the RBI. However, they will have to comply with IRDA guidelines.

Under existing bancassurance guidelines, a bank can act as a corporate agent and sell policy of only one life insurer and one non-life insurance company.