UCO Bank general insurance JV joint venture to get finalized by September

State-run UCO Bank is working on plans to make its venture into general insurance business. According to top official details will be finalized by September, including the selection of partners.

UCO Bank Chairman and Managing Director S K Goel told PTI, "We plan to enter general insurance by launching a joint venture. We hope to finalize the JV structure by September".

Mr. Goel informed, "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".

He added in addition to the government lender, there will three more partners of JV -- a state-owned bank, a foreign bank and a private general insurance company.

He informed that UCO Bank and the other state-owned lender will hold a joint shareholding of 49 per cent. The official said UCO Bank's shareholding will probably be in the range of 28-30 per cent in the JV.

Whereas the private insurer and foreign bank jointly will have a shareholding of 51 per cent in the subsidiary, Mr. Goel told, without disclosing the identity of players.

However several of the leading state-owned lenders, such as State Bank of India and Union Bank of India, are already having insurance subsidiaries in partnership with global players.

Goel added UCO Bank will be proceeding as a promoter and distribution partner in the business, while it is expecting the domain expertise from its foreign and private partners.

He informed the Kolkata-based lender for the meantime has decided to put on hold its plans to launch a financial services subsidiary seeing the adverse market conditions.

"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."

Earlier the bank had plans of launching the subsidiary with a view to offer a one-stop-shop for financial services such as sale of insurance and mutual fund products, loan syndication and corporate advisory services.

UCO Bank was planning to launch the financial services unit in association with a foreign partner. In this UCO Bank was to hold a 49 per cent stake in the proposed company and the foreign partner 26 per cent.