Public sector, UCO Bank is planning to enter the general insurance space through a joint venture by the end of September 2009. "We plan to enter general insurance by launching a joint venture. We hope to finalize the JV structure by September," said S K Goel, Chairman and Managing Director of UCO Bank.
"A final picture about the company will emerge in 2-3 months. We are currently in talks with potential players to set up the joint venture," said Mr. Goel.
This foray will include three more partners apart from UCO Bank. The other three are a state-run bank, a foreign lender and a private general insurance company.
Goel informed that UCO Bank and the other PSU bank will hold 49% stake in the joint venture, out of which UCO is likely to hold about 28-30%. The remaining 51% of the shares will be held by the foreign bank and private insurer.
UCO bank is going to act as promoter and distribution partner in this venture where as the domain will be taken care by its foreign and private partners, said Goel.
Meanwhile the bank had deferred its plans of launching a financial services subsidiary at the back of unfavorable market situations. "We had plans to launch a financial services subsidiary. But, with the down turn in financial markets and the fact that credibility of rating have suffered in the recent past, we have decided to put the plan on hold," said Goel.
UCO Bank wanted to foray this subsidiary so as to offer all financial services such as sale of insurance and mutual fund products, loan syndication and corporate advisory services at one place.
The bank had planned to open this financial subsidiary with a foreign partner. UCO bank was likely to hold 49% stake and the other partner was suppose to hold 26% share in the proposed company.
Meanwhile the general insurance foray plan of the bank is likely to come under action by the September end. There are other banks such as State Bank of India and Union Bank of India that also have insurance subsidiaries in partnership with global players.