While the Insurance Regulatory and Development Authority (IRDA) has released the guidelines for banks to sell products of multiple insurance companies, most of them are unlikely to rush to seek broking licence.
According to a senior IRDA official, the Reserve Bank of India is not keen on banks becoming brokers as many of them have promoted insurance companies and this could lead to a conflict of interest.
Also, as brokers, banks will have a fiduciary responsibility to customers and can be made accountable for mis-selling. Many big lenders such as ICICI Bank, HDFC Bank, SBI, IDBI Bank, Bank of Baroda, Canara Bank, Bank of India, and Punjab National Bank have promoted insurance companies.
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