Canara HSBC Oriental Bank of Commerce Life Insurance Enters into Strategic Tie-ups with Two Regional Rural Banks

New Delhi, December 23, 2009:

Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited – a partnership between two of India’s largest public sector banks, Canara Bank and Oriental Bank of Commerce, and HSBC Insurance (Asia Pacific) Holdings Limited, today announced strategic tie-ups with two Regional Rural Banks (RRBs) - Shreyas Gramin Bank in Uttar Pradesh and Pragathi Gramin Bank in Karnataka. The two RRBs are sponsored by Canara Bank. Along with the three shareholder banks, the RRBs too will function as corporate agents of the life insurer to sell its products.

Through a strong network of around 550 branches of the two RRBs, Canara HSBC Oriental Bank of Commerce Life Insurance Company will reach out to more than 4.6 million customers to provide customised life insurance solutions in addition to the existing customer base of 48 million.

Speaking on the occasion, Mr Harpal Karlcut, Chief Executive Officer, Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited, said, “Focusing on an organic growth strategy and our commitment to deliver affordable insurance solutions to address the needs of the rural population, the social sector and economically weaker sections of the society, especially those who have none or very little access to organised financial services, the Company has entered into strategic tie-ups with Canara Bank sponsored Shreyas Gramin Bank and Pragathi Gramin Bank.”

He further added, “Given that the market is inadequately insured, the rural areas offer great potential. We are aided by our strong distribution model that will enable us to take life insurance to large sections of the society and help meet every Indian’s need for insurance.”

Shreyas Gramin Bank and Pragathi Gramin Bank, have very strong customer relationships and will provide an excellent opportunity for Canara HSBC Oriental Bank of Commerce Life Insurance to further strengthen presence in the important markets of Uttar Pradesh and Karnataka.

Saral Bima, one of the Company’s flagship products will be sold through the RRBs. The low premium product is tailored to meet the investment cum insurance needs of customers in the semi-urban and rural cities. It has a one page application form and requires no medicals. This plan has loyalty additions and partial withdrawal facility valued by this customer segment. Going forward, more products catering to the customer profiles of the RRBs will be planned.

In order to meet its expansion plans, the life insurer’s three shareholders have infused capital of INR100 crore on December 17, 2009 – increasing the total capital base to INR625 crore.

Mr Karlcut added, “The JV has strongly committed and aligned shareholders. With a capital base of INR325 crore, we were one of the most highly capitalized life insurance company at launch. The Company received a further infusion of capital on INR 200 crore in December 2008 and the three shareholders will infuse capital to support the Company’s growth as and when required.”

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(This is a press release from Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd)