State Bank of India (SBI) has ruled out any capital infusion into its life insurance joint venture — SBI Life Insurance during the current financial year.
“SBI Life is pretty well capitalized. Given the internal accruals they (SBI Life) are generating, we do not envisage any additional capital infusion this financial year”, Mr Pratip Chaudhuri, SBI Chairman said.
On initial public offering (IPO), Mr Shyamal Acharya, Deputy Managing Director & Group Executive (Associates & Subsidiaries) said that a final decision would be taken only after IRDA finalizes its guidelines for public offerings by life insurers.
Even under the draft IRDA guidelines, SBI Life is eligible for an IPO as it has already completed ten years of existence, it was pointed out.
Mr Chaudhuri also said that SBI Life had recorded a net profit of Rs 300 crore in 2010-11. For the first quarter this fiscal, SBI Life recorded a net profit of Rs 144 crore, up 27 per cent over net profit of Rs 114 crore recorded in the same period last year.
SBI Life is largely dependent on the bancassurance model for selling its products, rather than through agents.
Currently, SBI holds 74 percent stake in SBI Life Insurance, which is capitalized at Rs 1,000 crore. The remaining 26 percent is with BNP Paribas Cardiff.