Union Bank of India has inked a pact with SBI Life Insurance Company Ltd to offer a life insurance cover to the former's home loan customers on a group basis.
"We expect around 8,000 loans to be covered under this scheme in the fiscal 2004-05," Union Bank chairman and managing director V Leeladhar told newspersons after signing the agreement in Mumbai on Wednesday.
The minimum cover is Rs 50,000 and maximum cover is Rs 50 lakh (Rs 5 million), he said, adding the tenure of the loan should be between five to 20 years.
The home loans of the bank in FY04 have grown from Rs 1,500 crore (Rs 15 billion) to Rs 1,800 crore (Rs 18 billion) and the portfolio was rising by 20-21 per cent every year, the CMD said.
The premium would be linked to the loan amount, tenure and age of the borrower, he said.
Asked about choosing SBI Life over HDFC Standard Life Insurance with whom the bank has a bancassurance tie-up, Leeladhar said: "The choice was made after a study of schemes of several entities and we found that this product was best suited for our customers."
SBI Life managing director and CEO S Krishnamurthy said the entity was offering such a product for home loan customers of SBI, its seven associates, some private housing finance companies and United Bank of India.
"On an average about 50-60 per cent customers from SBI opt for this scheme and we are getting 10-12,000 applications per month," he added.
