PNB likely to finalise life insurance biz partner by July

The country's second largest public sector lender Punjab National Bank (PNB) may finalise a partner for its life insurance business in a month, as it has received financial bids from three players.

The bank is scrutinising all the financial bids and may take a view by the end of next month, a senior official of the Punjab National Bank said.

Financial bids were sent by the three shortlisted life insurers -- Aviva, Metlife and Bharti AXA.

The bank will finalise the partner for its life insurance business based on the evaluation of the proposals submitted by these insurance companies, the official said.

If PNB picks up stake in any life insurer, either domestic or overseas partner will have to dilute stake in the insurance firm.

Aviva India is 74:26 per cent joint venture between FMCG player Dabur India and UK-based Aviva Plc, while Bharti AXA Life Insurance is joint venture between Bharti Enterprises and AXA of France.

Earlier this month, Reliance Industries agreed to pick up the entire stake of Bharti Enterprises and enter into the life insurance space.

Metlife India stakeholders include Jammu and Kashmir Bank, Shapoorji Pallonji and other investors, besides Metlife of the US.

Last year, PNB announced its plans for a strategic partnership with an insurance player. The bank had said it has decided to participate in the life insurance venture through "a corporate agency tie-up along with equity participation in an existing Indian life insurance company".

The bank is among the few lenders with a large branch network which does not have a stake in a life insurance company.

PNB, in 2010, decided to part ways with it foreign partner in a proposed life insurance joint venture it set up four years ago.

PNB bought the entire 26 per cent stake held by Principal Financial Group and the 32 per cent participating interest of domestic firm UK (Berger) Paints in Principal PNB Life Insurance Company Ltd.

PNB's stake in the proposed joint venture was 30 per cent, while that of Vijaya Bank was 12 per cent.