Allahabad Bank set to
ink bancassurance tie-up with ECGC Ltd.
Kolkata based public sector commercial bank, Allahabad Bank, which is the oldest
Nationalised Bank with a chequered history of long 139 years, has entered into a
Bancassurance tie-up with ECGC Ltd., a Govt. of India Enterprise, at Kolkata today. Mr.
O.N.Singh, Chairman & Managing Director of Allahabad Bank and Mr. P.M.A. Hakeem, IAS,
Chairman & Managing Director of ECGC LTD signed the Agreement.
The concept of ‘Bancassurance’ i.e. banks marketing insurance products has
gained prominence among banks in India. Insurance Companies are actively involving banks
in the marketing of their products.
ECGC Ltd. is a pioneer organisation in the field of export credit insurance for the
past 46 years, extending credit insurance protection to the exporters against non-receipt
of export proceeds for commercial and political reasons since 1957. A tie-up with ECGC is
therefore unique. There are five products now available for the Indian exporters under the
Bancassurance for marketing by the Banks, which will provide considerable scope for the
Bank to woo the exporter clientele.
Mr. Singh, Chairman & Managing Director of Allahabad Bank, speaking on the
Bank’s performance for the 3rd quarter of the current financial year, said that the
Net Profit of the Bank increased by more than 115% during the quarter. The net NPA is
likely to fall below 4% this year. The cost of deposit has also come down to 5.80%. The
Bank has taken various steps in the recent past to augment fee based income which included
Bancassurance tie up with National Insurance Corporation Ltd for general insurance
business, with ICICI Prudential for distribution of life insurance products and with LICI
for introduction of a low-cost group insurance plan for the depositors. . The tie up
arrangement with ECGC is another step in this direction. The Bank has also decided to sell
UTI Mutual Fund products through its branches. The Bank is targeting to reach the volume
of business of Rs 60,000 crores by March 2005.
To increase the International business, the Bank has decided to open its first OBU at
Noida. Through such branch Bank will be in a position to raise more Foreign Currency Funds
for its clients. It has also plans to open two foreign branches during the next year.
‘Al-Expo’, a scheme to finance exporters to purchase and furnishing showrooms/
places at the Indian Trade Mart, Greater Noida is a product offered by the Bank to the
exporter clients. Bank is offering other products namely, packing credit in rupee, packing
credit in foreign currency, post shipment credit in rupee, post shipment credit in foreign
currency, collection of export bills at competitive rates for the exporters.
With this tie-up with ECGC, both the organisations will be mutually benefited. The Bank
will be in a position to increase its fee based income and increase export client base.
The ECGC will be able to reach to remote part of the country through the strong network of
the Bank and the exporters will be benefited of having a one-stop-shop for export finance,
credit insurance and marine insurance, all under one roof.
Mr. K.K. Rai, Executive Director, Allahabad Bank and Mr. Prabhakaran, Executive
Director, ECGC Ltd were also present in the occasion.
Ms. Murlidharan, General Manager, ECGC Ltd welcomed the guests and Dr. Bikash Ghosh,
General Manager, Allahabad Bank proposed vote of thanks.
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