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HSBC Insurance (Asia Pacific) Holdings Ltd (INAH), one of the shareholders in Canara HSBC OBC Life Insurance Co Ltd (CHOICE), has expressed its intention to acquire Punjab National Bank’s stake in the life insurance company. PNB currently hold 23 per cent stake in CHOICE.
“The bank has received a communication from HSBC Insurance (Asia Pacific) Holdings Ltd (INAH), one of the shareholders of the company, conveying its intention to acquire Bank’s stake in the company,” PNB said in a regulatory filing with the exchanges.
However, the communication from INAH is subject to further evaluation by PNB, it added. It may be recalled that after the three way amalgamation with Oriental Bank of Commerce and United Bank of India from April 1, 2020, PNB had become a promoter shareholder, with 23 per cent stake in CHOICE.
Prior to this amalgamation, OBC held 23 per cent stake in CHOICE. Canara Bank has a 51 per cent stake and HSBC Insurance (Asia Pacific) Holdings has 26 per cent stake in the life insurer, which is now an associate company of PNB.
PNB had in May 2021 this said that it will divest stake in CHOICE at an “appropriate time, depending on market conditions and available options”.
IRDAI norm
The plan to exit CHOICE is in keeping with the insurance regulator IRDAI’s norm that a commercial bank should not hold more than 10 per cent stake in two life insurance ventures at the same time.
Post the OBC amalgamation, PNB had significant shareholding in two life insurance ventures — PNB MetLife insurance (30 per cent stake) and Canara HSBC OBC Life (23 per cent stake).
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