• PAGE ONE
• INDEX
• HOME

Centurion Bank quits tie-up with Canada Life

Sarbajeet K. Sen

NEW DELHI, Nov. 22

THE initial churning in the insurance industry continues with yet another proposed tie-up falling by the wayside. The Centurion Bank, which was working out a three-way tie-up with Canada Life Assurance Co and the Ardee Group, has pulled out of the propos ed venture.

As a result of the reworking of the arrangement, the Delhi-based Ardee Group is now expected to pick up the entire 74 per cent stake on offer for the Indian partners, with Canada Life holding the remaining 26 per cent.

Incidentally, the Ardee Group was a late entrant into the proposed venture. Centurion Bank and Canada Life had originally entered into a memorandum of understanding to make an entry into the Indian insurance sector.

Confirming the development, senior Canada Life officials said that the Reserve Bank of India's regulations which would have limited Centurion Bank's stake in the venture to 50 per cent acted as a dampener to the bank's plans. It is understood that the ba nk wanted to hold a majority stake in the venture.

The break-up comes close on the heels of several such tie-ups firmed up before the formal opening up of the insurance sector falling apart. The latest among these are the AXA Group breaking up with Cholamandalam Investment and Finance Co, the CGU parting ways with Hindustan Times, Allianz falling apart with Alpic Finance and Dabur breaking away from Allstate.

``When the marriages took place over the past couple of years one did not know how the regulations and the market would be like,'' Mr K.V. (Kam) Rathee, Senior Counsel, Canada Life Assurance Co, Toronto, told Business Line.

Insurance industry representatives said that the inability to find acceptable suitors has come in the way of many companies, both Indian and foreign, who have been waiting on the wings to enter the insurance sector in proceeding with their plans of filin g for registration with the Insurance Regulatory and Development Authority (IRDA).

The market developments, especially the break-ups, has resulted in the IRDA receiving only about a dozen-odd applications for registration so far. Out of this, the authority has granted full licences to four companies while another two have been given in -principle clearance pending certain clarifications being provided to the authority on their ventures.