IDBI Bank and LIC have constituted a joint task force to chart out a roadmap, both for the bank as also its associate companies, even as the bank is considering extending the appointment of Rakesh Sharma, Managing Director and Chief Executive Officer, for three years.
The major areas of synergy for the short-term pertain to selling LIC policies through IDBI Bank branches, management of cash and other premium receipts of LIC through the bank’s branches.
The statement elaborated that the long-term strategy includes common investment strategy, use of other resources such as real estate, commercial and residential space, IDBI Bank branches, premises and ATMs, digital marketing, rationalisation of the common subsidiaries in mutual funds, life insurance, etc.
With this strategic alliance, the bank said it stands to gain immensely as it will be able to augment its retail business, thereby de-risking its business portfolio and ensuring a rise in other income/operating profit, net interest margin and a substantial increase in CASA (current account, savings account). The bank has already recorded noticeable improvements in the CASA ratio to 38 per cent (of total deposits) as on December 31, 2018.