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Which brand is bigger?
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Introduction
BANKS INSURANCE COMPANIES
y Corporate Entity
y Registered with the RBIy Accepts deposits and gives
loan on interest.
y Financial Institution
y Sells Insurance against assets.y Insurance, is a form of risk
management.
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H
istory of Bankingy 1786- 1st banks in India
y 1806- Bank ofCalcutta
y 1921 Bank ofCalcutta , Bank of Bombay and Bank ofMadras formed the Imperial Bank of India.
y 1947- Imperial Bank of India was renamed as SBI.
y 1949- RBI was nationalised.
y 1991-Liberalisation.
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Evolution of Insurance in India
y 1818- 1st Insurance Company.
y 1870-1st Life Insurance Company.
y
1912- 1st Law to
Regulate the Life Insurance Business.y 1928- The Indian Insurance Companies Act
y 1938: Amendment of the Insurance Acty 1956:245 Indian&foreign insurers &provident
societies are taken over by the central government &
nationalized.y LIC formed by the LIC Act, 1956, with a capital
contribution of Rs. 5 crore from the GovernmentofIndia.
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Scenario of banking
BANKS
Non-ScheduleSchedule
Commercial Co-operative
Nationalised SBI &groupbanks
Regional &Rural Banks Pvt. Sector
banks
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13 Private players in the market today:
6 Bank owned insurers- HDFC Standard Life, ICICIPrudential, ING Vysya, Metlife, OM Kotak, SBI Life
7 Independent Insurers- Bajaj Allianz , Birla Sun Life, Aviva,Max New York Life, Tata AIG, Reliance Life and Sahara Life
LIC The state Insurer is the dominant player with over 70%
of the market share
Total Life Market Size at Rs. 250 billion (USD 5.5. Bn)
Insurance Industry in India
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1.
Benefits to IndianE
conomyBanks Insurance companies
y Credit creation.
y Flow of money.
y Cash rich
y Purchase of governmentbonds.
y This money is used by the
government f
or devel
opment.
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PublicPublic $$
BankBank
Credit CreationCredit Creation
Rs200Rs200
Rs150Rs150
Rs112.5Rs112.5
Rs150Rs150Rs112.5Rs112.5
Rs84.4Rs84.4
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2.InterdependenceBanks Insurance Companies
y All bank a/c are insured uptothe extent of Rs. 1 lac. WithDICGC.
y Banks require assets of thefinanced by them insured
with the ins.Co
y Ins. Co. need bankingfacilities for smoothfunctioning.
y Insurance claim is paid bybanking services.
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3.
S
erv
ices and productsBanks Insurance Companies
y Along with their own
services , banks also providewith other insuranceproducts.
y InsuranceCompanies
Provide their own insuranceproducts such as lifeinsurance , insurance againstassets etc.
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SERVICES BYBANKS
ACCEPTINGDEPOSITS
GRANTINGLOANS
SECONDARYFUNTIONS
VAULTSAND
LOCKERS
LETTER OFCREDITCURRENT
CASHCREDIT
LOANSADVANCESBILLS
DISCOUNTINGG
SAVINGS FIXEDRECURRING
OVERDRAFT
FOREIGNEXCHANGE
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Types of Insurance
Life insurance
Non - Life Insurance
(general insurance)
Property (eg.Builders risk insurance)
Aviation(eg . Private aircraft insurance)
Marine (eg. Marine hull insurance)
Miscellaneous (eg. Purchase insurance)
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Bancassurance
y Banks & Insurers across the World have realizedBancassurance is the distribution channel, which
would help them achieve economies of scale andboost their revenues in the 21stCentury
y Bancassurance is the selling of insurance andbanking products through the same channel, most
commonly through bank branches selling insurance.
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4.Benefits to organizations.
Banks Insurance companies
y Without banks it would be
very difficult to transfer fundsand undertake tradetransactions.
y Thus, the majorityof thepopulation today has bank
a/c.
It helps the business
organization to reduce thelosses as they can insure theirinventory and other assets.
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5. Additional services provided
Banks Insurance Companies
y
Investment banking,merchant banking, assistancein mergers and acquisitions
yInsurance companies do notprovide any such services.
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6.SafetyBanks Insurance Companies
y People save their money in
banks and they receive areasonably good amount ofinterest.
y They provide protection
against life and assets.
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7. Benefits to family.Banks Insurance Companies
y Banks are used to transfer
funds to
their relatives andchildren for payment of fess ,etc
y The nominee of a life
insurance po
licy is entitled to
receive the amount after thedeath of the assured.
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Banks are a better brand
becausey Banks offer safety and reasonably good interst on the
savings
y
Banks provide credit for the economy.y Even insurance co's need banking services;
y Banks also sell insurance products.
y Banks also provide various other services such as
investmentbanking, raising money from publicthrough IPO's.
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Bibliographyy http://en.wikipedia.org/wiki/History_of_banking
y http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?page=PageNo4&mid=2
y http://en.wikipedia.org/wiki/Investment_banking
y http://en.wikipedia.org/wiki/Savings_bank
y http://en.wikipedia.org/wiki/Merchant_banking.
y http://www.financialcrisis2009.org/forum/Insurance/How
-does-insurance-affect-our-economy-235984.htmy http://www.jstor.org/pss/1991084
y http://moneyterms.co.uk/bancassurance/
y http://en.wikipedia.org/wiki/Bancassurance
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