RBI asks banks to disclose bancassurance fees in their balance sheet

Jan 07, 2010: As a further step in enhancing transparency, Reserve Bank of India has decided that banks should disclose in the ‘Notes to Accounts’, from the year ending March 31, 2010, the details of fees/remuneration received in respect of the bancassurance business undertaken by them.

Bancassurance symbolises the convergence of banking and insurance, whereby the insurance company uses the bank to sell insurance products. The term has its origins in France and involves distribution of insurance products through a bank's branch network. While bancassurance has developed into a tremendous success story in Europe, it is a relatively new concept in Australia and Asia.

Most insurers have entered into memoranda of understanding with banks to use their branches as outlets for marketing standard products.



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