MUMBAI: Canara Bank, Oriental Bank of Commerce (OBC) and HSBC Insurance (Asia-Pacific) Holdings Ltd have signed an agreement to mutually set up a life insurance company in the country.

According to a release the company has been named as Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited.

Canara Bank would hold the major stake of 51 per cent stake in the company, whereas HSBC and OBC will hold 26 per cent and 23 per cent stake correspondingly.

The overall capitalization of the new venture will be Rs 325 crore, out of which Canara Bank will put in Rs 102 crore, HSBC Rs 177 crore and OBC Rs 46 crore.

As per the terms of the agreement, HSBC would provide a range of management services, which would include nominating executives for certain senior roles, the release said.

M B N Rao, Chairman and Managing Director, Canara Bank stated, “The new insurance company aims to introduce a variety of insurance products/services, fulfilling the needs of the entire spectrum of people, including high networth individuals, professionals, SMEs, farmers and also micro insurance services for the rural/semi-urban masses.”

The new life insurance company will have access to more than 40 million clients and a formidable countrywide distribution network of 3,600 arms pan-India.

“While both Canara Bank and OBC offer an extensive client base, complementary distribution networks and broad local market knowledge, HSBC brings to the partnership its considerable insurance experience, product range and proven bancassurance capabilities,” the release added.