It has been reported by a finance official that the finance ministry has asked the public sector banks to establish insurance broking arms and promote the policies of various insurance companies by February.
Further it has been reported that finance ministry is asking maximum banks to become insurance brokers, this will reduce the probability of mis-selling. Many public and private sector banks like state bank of India, ICICI bank, Punjab national Bank, Andhra bank have initiated the measure and have promoted the insurance companies. In budget 2013 Finance minister P. Chidambaram said banks will be allowed to work as insurance brokers, however many of the banks are not in support of this. According to broking guidelines while selling insurance products banks will have fiduciary responsibility towards the customer.
Chairman of bank of Baroda said that the idea is not so good though it will help to solve the problem of under penetration of insurance section, but before bringing it into operation they still need to think over it.