Tata AIG, Allahabad Bank tie up to offer mortgage cover (Lead)

July 2nd, 2008 - 8:14 pm ICT by IANS  

Kolkata, July 2 (IANS) Life insurance player Tata AIG and public sector Allahabad Bank joined hands Wednesday to provide mortgage insurance facilities to the bank’s housing loan customers. Announcing this here, Allahabad Bank executive director J.P. Dua said, “We recognise the need to offer our customers the best of products and services beyond core banking. The tie-up for mortgage insurance is a significant step in that direction.”

The bank already offers similar facilities to customers through a tie-up with the state-owned Life Insurance Corp (LIC).

The basic idea behind these tie-ups is to provide security to the housing loan customers, he said.

“In case of demise (of the borrower), the family can re-pay the loan amount from the money they will get from insurance. Thus, the loan amount will not pass on to the next generation,” Dua added.

However, borrowers can also take home loans without opting for the covers offered by LIC and Tata AIG.

Allahabad Bank has 2,154 branches across India and plans to add another 117 in places where it has relatively less presence.

Upbeat about growth prospects, Dua said: “We expect a credit growth of 20 percent and deposit growth of 17 percent in the current fiscal.”

He added: “We have headroom for raising more capital. It can go up to Rs 20 billion.”

The bank plans to double non-interest income this fiscal to Rs.200 million.

“We are planning to open six retail malls, which will take charge of loan-related legal formalities and mutual funds,” Dua said.

The bank plans to tie-up with Kotak Mahindra Insurance to provide education loans. “Talks are on. It is likely to be finalised within two months,” he added.

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