With grand new merger schemes ready for the 10 public sector banks(PSU), which has been unveiled by the union finance minister Nirmala Sitharaman on Friday, the bancassurance landscape in terms of ownership and distribution network in country will be changing significantly.


While a few PSU banks will be have to exit their existing insurance joint ventures, some merged entities will get a larger number of bank branches to sell  their  products.


There are three joint venture companies which are owned by banks where ten banks are being consolidated under four entities. Since there would be overlap and regulatory issues, these have to be realigned.


At least three insurance companies —Star Union Daiichi, Canara HSBC OBC Life Insurance and India First Life Insurance — could witness a change in their ownership structure because of the bank mergers, but that may probably give these firms a better reach to build their businesses with extended branch network.


Union Bank of India, which owns 25.1 per cent  per cent in Star Union Dai-ichi Life insurance, where other partners are  Bank of India and Japan’s Daiichi and  Andhra Bank.


Andhra bank has a 30 per cent stake in IndiaFirst Life, which it may have to exit and Star Union Daichi life insurance will have more branches from Andhra Bank to sell its products.

Canara Bank has a life insurance joint venture along with the partnerships of  HSBC and Oriental Bank of Commerce. OBC,holding 30 per cent stake in the life insurance JV, will be merged with Punjab National Bank Limited (PNB) and will have to exit Canara HSBC OBC Life Insurance. 


PNB MetLife India Insurance Company, a JV among  MetLife International Holdings LLC (MIHL), Punjab National Bank Limited (PNB), Jammu & Kashmir Bank Limited (JKB), M. Pallonji and Company Private Limited and other private investors,will be able to make use of the branch network of OBC, which has to exit Canara HSBC OBC Life Insurance .


India First also had gained in terms of  distribution network after Dena Bank and Vijaya Bank earlier merged with Bank of Baroda, which is a majority shareholder in IndiaFirst Life.