IDBI Bank drafts yet another revival strategy
Mumbai: Struggling IDBI Bank is charting out a revival strategy to bring banking and insurance under one roof to its customers, along with its new owner Life Insurance Corporation.
In January, LIC had completed the process of picking up a controlling 51 per cent stake in the nearly crippled IDBI Bank which has been under the prompt corrective action framework of the regulator that bans it from corporate lending and branch expansions, salary hikes and other regular activities.
The RBI action followed after its bad loans touched 33 per cent which in the December 2018 has come down to 29 per cent of its total assets.
The bank and LIC, through its collective network of branches, offices and workforce, have started leveraging their mutual business synergies, a statement said Sunday. The major areas of synergy identified for the immediate short-term are pertaining to selling of LIC policies through IDBI branches.
Other areas where both the players will work together include cash management and premium receipts of LIC through the bank branches, enabling the technical wherewithal available in both the entities to offer digital solutions to their respective customers.
These strategic initiatives will pave the way for improved operations and better financials, which in turn, would lead to wealth maximisation for all our stakeholders, including LIC and the government, the statement said. "This initiative will help in turning around the bank.
We will get access to LICs large customer base, which will help in growing our business as also," bank's managing director and chief executive Rakesh Sharma said.
The lender's board has approved appointment of LIC as a corporate agent under bancassurance channel.
In the long-term, the bank and LIC will have a common investment strategy, use each others resources like real estate, commercial and residential space, bank branches, premises and ATMs and digital marketing, among others. Both the entities will also undertake rationalisation of the common subsidiaries in mutual funds and life insurance arms, the release said. The lender said a joint task force has been constituted to chart out the future roadmap, both for the bank as also for the associate companies.