RBI Policy: Rao says banks to decide on insurance premium financing

Informist, Thursday, Jun 8, 2023

MUMBAI – The Reserve Bank of India does not issue guidelines on insurance premium financing by banks and these decisions are taken by the lenders and their respective boards, Deputy Governor M. Rajeshwar Rao today said at a press conference after the Monetary Policy Committee’s statement.

“Credit decisions are taken by board-approved policies of banks. There are no specific guidelines from RBI on this. Insurance premium financing would be a product and banks would have to see its potential and take a call on that,” Rao said.

Insurance premium financing allows customers, both retail and corporates, to take loans for buying an insurance and spread premium payment over a longer period of time.

If implemented, this move by banks will help in increasing insurance penetration in India and also create new avenues of consumer and corporate financing. End

Reported by Subhana Shaikh

Edited by Vandana Hingorani

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