OBC Signs non-binding MOU to set up a Joint Venture Company for Life Insurance Business in India

Oriental Bank of Commerce (OBC) has announced that the Chairman & Managing Director (CMD) of the Bank, CMD of Canara Bank and Authorised Representatives of HSBC Insurance (Asia Pacific) Holdings Ltd. on March 05, 2007 has signed a non-binding Memorandum of Understanding (MOU) to jointly establish a Life Insurance Company in India.

Under the proposed agreement, the Bank envisages to have 23% stake in equity, Canara Bank is expected to have 51% stake and HSBC Insurance proposes to have 26% stake (maximum permissible as per extant regulations/Indian Law). The proposed Life Insurance Company will be capitalised at Rs 200 crore, of which HSBC is expected to contribute Rs 52 crore, Canara Bank Rs 102 crore and the Bank is expected to contribute Rs 46 crore. In addition, HSBC Insurance is also expected to bring a premium of Rs 125 crore.

Completion of the above non-binding MOU for the Joint Venture is subject to various approvals viz. Reserve Bank of India permission, IRDA permission and other Regulatory approvals subject to the Three Partners agreeing to the final terms in the light of regulatory approvals.

Source : Equity Bulls

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