After the hike in the BPLR would have hit the home loan customers, Allahabad bank is trying to heal their wounds by providing term loan facilities for housing loan customers of their bank. For this purpose, Allahabad Bank has tied-up with Tata AIG Life for providing term loan facilities for housing loan customers of the bank on a credit basis.
The Kolkata based bank has tied up with Life Insurance Corporation of India (LIC) for providing a similar insurance on housing loans.
This is just one of the new endeavours which the bank plans to undertake. J P Dua, executive director of Allahabad Bank, said that the bank was also planning to enter similar tie-up arrangements with insurance companies for education and automobile loans.
Dua also hinted that, for education loan, the bank was planning to tie-up with Kotak Mahindra Insurance Company.
Dua also said that the insurance cover has been a success already, with about 31 per cent of home loan borrowers in the bank opting for it. However, he added that the insurance cover will be optional for borrowers, and would be extended to new as well as existing customers of the bank.
Speaking about the insurance cover, Joydeep Roy, chief distribution officer, Tata AIG, said, "Customers would be offered reducing term life insurance designed to cover credit loan obligation of the insured member against death during the term of the coverage."
Under the agreement, the bank would extend Tata AIG's housing loan cover through its network of 2,154 branches across the country.
In case of an unfortunate event like death of the credit loan borrower, Tata AIG would provide for repayment of the housing loan. Also, the family would get back the property.
Dua said that the bank was planning to open 115 more branches by December 2008 and another 150 next year, subject to approval by the Reserve Bank of India (RBI).
Talking about the future plans of the bank, Dua was optimistic saying that he belived that the bank had headroom to raise up to Rs 2,000 crore this fiscal. He also said that this year the stress would be on retail banking. The bank is also looking to open six retail malls for marketing retail products. Last year, the bank had a non-interest income of Rs. 10 crore and it also aims to double it this year.