Bancassurance & Other Services
Bancassurance is a partnership between a bank and an insurance company. In this setup, the bank sells insurance products to its existing customers. The word comes from combining 'Bank' and 'Assurance'. This model allows insurance companies to reach more people using the bank's large branch network. For the bank, it is a way to earn extra money without lending. This extra money is called 'fee-based income' or 'non-interest income'.
Concepts (3)
This is the money a bank earns from services rather than interest on loans. It includes commissions from selling insurance, mutual funds, and locker charges. This income is very stable because it does not depend on whether a borrower repays a loan.
This is the money a bank earns from services rather than interest on loans. It includes commissions from selling insurance, mutual funds, and locker charges. This income is very stable because it does not depend on whether a borrower repays a loan. It helps banks stay profitable even when the economy is slow.
KYC is a mandatory process to verify the identity and address of a customer. It is essential before selling mutual funds or insurance. It helps prevent money laundering and fraud.
KYC is a mandatory process to verify the identity and address of a customer. It is essential before selling mutual funds or insurance. It helps prevent money laundering and fraud. Common documents used for KYC in India include Aadhaar cards, PAN cards, and Voter IDs. Banks must update these records regularly.
In this model, the bank acts as a formal agent for the insurance company. The bank's employees are trained to sell specific insurance products. The bank is responsible for the quality of the sale.
In this model, the bank acts as a formal agent for the insurance company. The bank's employees are trained to sell specific insurance products. The bank is responsible for the quality of the sale. It can partner with a maximum of three companies in each category (Life, General, Health). For example, a bank clerk directly explains a life insurance plan to a visitor.
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