New India Assurance seeks to use banking correspondents

The RBI with a view to giving a leg-up to financial inclusion,recently permitted banks to appoint banking correspondents (BCs) in areas -typically villages- where opening a branch may not be viable. The BCs could be small businesses, such as kirana shop owners,or even influential individuals. These people provide basic banking services to the local populace on behalf of the bank that has appointed them.New India Assurance has now suggested to the Insurance Regulatory and Development Authority(IRDA) that the company - and all insurance companies- be allowed to use banking correspondents to service the insurance sector also.At present, according to IRDA's regulations, micro insurance can be sold only directly by the insurance company or through non-governmental organisations or self help groups.The IRDA is considering the idea as said by Mr. Ramadoss,CMD,New India Assurance.(BL 27082010)