Public sector lender Allahabad Bank is eyeing a double-digit growth in revenue through bancassurance in 2013-14.
Bancassurance involves the sale of insurance products approved by the Insurance Regulatory and Development Authority (IRDA) through retail banking. The bank earns a commission on the sale of such policies through its network.
The city-based bank had signed a memorandum of understanding with the Life Insurance Corporation of India to provide micro-insurance products such as Jeevan Madhur, Jeevan Mangal and Jeevan Deep as part of its financial inclusion programme.
The move is expected to increase the growth in commission income of the bank. In 2012-13, Allahabad Bank earned a commission income of Rs 19.87 crore from both life and non-life insurance businesses, registering a 5.3 per cent growth over the previous year.
“We expect revenue through bancassurance to register a double-digit growth this year,” T.R. Chawla, executive director of Allahabad Bank, told The Telegraph.
Chawla said micro-insurance products offered lower premium and were, therefore, suited for people who were otherwise unable to afford typical insurance products.
“We would leverage on our banking correspondent channel across the country to provide these low-premium products,” he said.