IDBI Bank Ltd. plans to streamline its banking and insurance businesses following its acquisition by Life Insurance Corp. of India, Press Trust of India reported March 10.
The bank is looking to take advantage of "mutual business synergies" by collaborating on the sale of Life Insurance Corp.'s short-term policies and management of premium receipts at IDBI branches, among other things.
IDBI Bank has been under the Reserve Bank of India's prompt corrective action framework framework due to the lender's high nonperforming asset level and negative return on assets. The initiatives are aimed at improving operations and financials to help turn the bank around.
The bank also appointed LIC a corporate agent of the bancassurance channel. The two entities will use a long-term investment strategy where they would use each other's resources. Common subsidiaries in mutual funds and life insurance arms will also be "rationalized" by both companies.
Further, IDBI Bank plans to sell 100 billion rupees worth of bad loans and boost efforts to recover delinquent debt after the central bank announced more stringent regulations, Bloomberg News reported March 10.
The lender has set up a task force that would monitor loans that display early signs of distress, said CEO Rakesh Sharma. IDBI Bank also plans raise 10 billion rupees in April through the sale of its holding in National Stock Exchange and National Stock Depository Ltd.
LIC acquired a 51% controlling stake in the bank in January.
As of March 11, US$1 was equivalent to 69.86 Indian rupees.