State Bank of India mulls composite agents for selling products
State Bank of India (SBI) plans to convert all the agents of its various subsidiaries as composite agents under which they will be able to sell various financial products. Currently, these agents distribute only their respective companies on an exclusive basis.
Under the plan, the SBI Group would now provide them with business leads on requests from their clients for availing the product offerings from associate companies in mutual funds, life insurance, credit cards, general insurance, and home and auto loans, say company sources.
The initiative has just been piloted by SBI Caps Securities (SSL), and arm of the bank?s merchant banking subsidiary SBI Caps, which has created a common distribution network called the Universal Distribution Network (UDN).
“The soft launch of the initiative, which works on lead management system, has already been done and we are planning to go for its formal launch by April. Moreover, we have got all the regulatory approvals in place,” SSL senior vice-president Arunangshu Paul said here. The SBI Group has currently 1 lakh agents on its fold. However, it is targeting only 20,000 active agents for the initiative.
We are targeting only 20,000 agents to begin with, who will be imparted training by us to sell group various products through referral business and we are targeting to collect Rs 80 crore through this initiative in very first year, he added. SSL is, at present, distributing 11 financial products as part of its bouquet, which include mutual funds, demat accounts, equity trading, life insurance and general insurance, secondary debt, e-insurance accounts, primary debt offerings, corporate bonds, IPOs and corporate fixed deposits.
It has plans to distribute more group products in the near future which include home and auto loans, and SBI Cap trustee wills. All these products are distributed through their online, branch and partner channels through a referral structure, where the deals are closed by SSL based on the reference made by the partners. The move will provide a very good earning opportunity to our all 37,000-strong distributors, SBI Mutual Fund chief marketing officer DP Singh said. .Being the largest subsidiary of SBI, SBI Life has 9,600 employees and 40,000 active agents. It will watch the initiative to find out the synergy. We at SBI Life will closely watch the progress of the UDN and see what kind of benefits we can derive for us, SBI Life managing director and chief executive Arijit Basu told this agency. SBI General is also hopeful of gaining business from the initiative.
“At present, 35 per cent of our business come from agency channel and we are also hopeful of significant rise in revenue earning from agency force from this initiative as we plan to more than double the number of our agents to 15,000 from the present 6,500 by the end of the next fiscal,” SBI General Insurance managing director and chief executive Bhaskar J Sarma said.