IOB Receives Approval To Acquire 10Pc In LIC''s Cards Biz

Indian Overseas Bank (IOB) will be the new partner in the credit card business led by Life Insurance Corporation of India (LIC). The board of the bank has permitted the proposal to buy up to 10% equity stake in the proposed company. The board of Corporation Bank, too, has approved a proposal to pick up 18% equity in the credit card business of its largest stakeholder LIC. The insurance company has 27% equity in Corporation Bank. LIC has been negotiating about foraying into the credit card business for over four years now.

LIC witnesses a huge business opportunity in the credit card business, given the fact that it has a large client base of over 20-crore policyholders. LIC likely to use the network of insurance agents to sell credit cards. LIC, which will primarily eye captive policyholders, has not yet announced the names of its partners. Domestic players will hold 49.5% while the foreign partner will hold up to 50.5% in the venture. Among the domestic partners, LIC mulls to hold 40%, Corporation will have 5% and IOB may hold 4.5% while the balance will be with the foreign partner. Both IOB and Corporation Bank already provide credit card services to their customers.