Kolkata-based Allahabad Bank is providing mortgage term loan facilities to his housing loan customers by signing an agreement with Tata AIG Life. Bank has also tied up with Life Insurance Corporation of India (LIC) for providing similar insurance on housing loans.
J P Dua, executive director of Allahabad Bank informed in the future bank has plans to get into similar tie-up arrangements with insurance companies for providing insurance on education and automobile loans.
He stated bank is planning to tie-up with Kotak Mahindra Insurance for education loan. He said around 31 per cent of home loan borrowers have already chosen for insurance cover.
Joydeep Roy, chief distribution officer, Tata AIG, said, "Customers would be offered reducing term life insurance designed to cover mortgage loan obligation of the insured member against death during the term of the coverage."
According to the agreement, the bank would be extending Tata AIG's housing loan cover through its network of 2,154 branches across the country.
According to bank sources bank will be opening 115 more branches by December 2008. Bank has submitted its application for the approval with the Reserve Bank of India (RBI).
Dua informed Allahabad Bank has the capacity to raise up to Rs 2,000 crore this fiscal. The bank would be concentrating on retail banking for which it would be opening six retail malls for marketing retail products.
Last year, the bank had raised Rs 10 crore from non-interest income of Rs 10 crore and aims to double it this year. Bank sources said insurance cover will be optional for borrowers, and this facility will be extended to new as well as existing customers of the bank.
Dua said the mortgage insurance would help customers in the time of need. In case of an unfortunate event like death of the mortgage loan borrower Tata AIG will provide for repayment of the housing loan and the family would get back the property.
The family would get back the property.
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