Life Insurance Corporation of India (LIC) will continue its bancassurance agreement with IDBI Bank even after it reduces its stake in the lender, CNBC-TV18 reported citing sources. The insurer will retain all bancassurance benefits with IDBI Bank even if its shareholding falls below 15%.
Currently, IDBI Bank is LIC’s largest bancassurance partner, contributing significantly to its distribution network. The development comes as the government and LIC together plan to divest nearly 60% stake in IDBI Bank as part of the ongoing strategic disinvestment process.
As per regulatory requirements, LIC has to cut its residual stake in IDBI Bank to below 15% within the next two years. Despite this, the bancassurance arrangement will remain intact, ensuring a steady channel for policy distribution through the bank’s extensive branch network.
The continuity of the pact is seen as a crucial move for LIC, allowing it to maintain a strong distribution footprint while meeting stake reduction obligations.
