Now a small-scale industrialist can avail of a bank loan on the strength of a term insurance plan. Farmers can now bank on a social security net, provided they have a Kissan credit card.
| Not only can a farmer provide for his retirement but can also look after his family interests in the unlikelihood of his demise. All this follows SBI Life Insurance Company’s launch of SBI Life Swadhan and SBI Lifelong pensions-group Kisan credit card (KCC) holders’ scheme today. |
| The former is a term insurance cover, which offers the benefit of a refund of premium facility. |
| Under the KCC insurance product, farmers have the option of earmarking a regular amount for their old age requirement in addition to enjoying life insurance cover till the age of 60. |
| “We have customised the international bancassurance model to suit the local environment as India is unique and needs to offer tailor-made solutions to the masses,” said SBI Life managing director and CEO R Krishnamurthy. |
| Today, the banking sector is adverse to give credit to SSIs due to the lack of collateral. “We hope that having capped the maximum coverage under the Swadhan product at Rs 1 crore, banks will be more open to offer loans to SSI units,” said Krishnamurthy. |
| He however, dismissed the argument that the product would act as an aid for banks to bring down their non-performing assets. “It is not aimed at NPA orientation, but rather helps improve credit perspective as a small industrialist can take a loan and the term insurance cover can act as a collateral for the bank,” said Krishnamurthy. |
| The KCC scheme targeted to offer a social security net to farmers, will initially be rolled out in Maharashtra, Karnataka, Uttar Pradesh and Punjab, where State Bank of India (SBI) has issued maximum gold Kisan cards. It will then be extended across the country by the year end. |
| Within four years of launch, there are 24 million Kisan cards today, of which 30 per cent have been issued by commercial banks. SBI alone has issued over 1.9 million cards to date and the numbers are increasing monthly. |
| In addition to pension saving, the Kisan cardholder could choose to take life insurance protection by paying a nominal amount as premium, said Krishnamurthy. |
| SBI Life has emerged a leader in the group life insurance business with a 30 per cent market share of the aggregate premium income of Rs 35 crore private sector players generated through the sale of group products, said Krishnamurthy. |
| SBI Life posted a 391.55 per cent rise in premium income at Rs 72.75 crore for the year ended March 31, 2003, compared with Rs 14.8 crore last year. |
| The total business undertaken has crossed Rs 4,000 crore while the total number of lives covered have exceeded five lakh, said Krishnamurthy. |
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