PNB calls off its stake sale in Canara HSBC Life Insurance

2 Mar 2023 , 08:02 AM

In a regulatory statement on Wednesday, Punjab National Bank (PNB) said that it will stop the process of selling its stake in associate firm Canara HSBC Life Insurance.

‘The Board of Directors of the Bank approved the withdrawal of the process for selling the Bank’s stake in Canara HSBC Life Insurance Co. Ltd. on February 28, 2023. This action was taken in response to a recent IRDAI notification dated December 5, 2022 on the IRDAI (Registration of Indian Insurance Companies) Regulations, 2022. Subject to regulatory approvals, the Bank will maintain its investor position in the Company ‘According to the press statement.

By merging with the former Oriental Bank of Commerce (OBC), the state-owned bank bought a stake in the life insurer.

According to market conditions and available options, the bank ‘intends to dispose its stake in Canara HSBC OBC Life Insurance Co. Ltd, an associate of the bank, at an opportune time,’ PNB had stated in a regulatory filing in 2021.

In the past, OBC owned 23% of the life insurance company, but PNB now owns it as a result of an amalgamation.

Canara Bank holds 51% of the company, while a foreign partner, HSBC Insurance (Asia Pacific) Holdings Ltd., owns 26%.

Prior to this, PNB had not specified the percentage of Canara HSBC OBC Life Insurance that it would reduce.

It also owns the largest stake (30%) in another insurer, PNB Metlife Insurance, as a promoter. The company was founded in 2001, and other shareholders include M Pallonji & Company (18%), Elpro (21%) , and US-based Metlife (26%).

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