Fed Bank, IDBI, Fortis in insurance JV
Federal Bank will join hands with IDBI and Fortis Insurance International to float a life insurance joint venture. Federal Bank will hold 25% stake in the life insurance JV while IDBI will be the majority partner with 49%. Fortis will hold 26% in the new venture.
When contacted M. Venugopalan, chairman and managing director of Federal Bank, confirmed the development. “We expect to get all the regulatory approvals for the new JV in the next four to five months and will be in a position to launch the insurance JV by the third quarter of the current fiscal,” he said.
“It is too early to talk about the capital structure of the new company. Once the board clears the proposal on May 29, we will take up the matter with other partners,” Mr Venugopalan said. But market sources here put the capital base at between Rs 700-800 crore.
In March 2006, IDBI tied up with Fortis Insurance International for its life insurance foray. The alliance began scouting for a third partner with large network of branches and a pan-India footprint. It initiated parleys with Bank of Baroda (BoB) but talks did not fructify as BoB sought majority stake in the new venture.