Mumbai: A day after Finance Minister Nirmala Sitharaman flagged mis-selling of insurance products by banks, the Insurance Regulatory and Development Authority of India (IRDAI) chairman Debasish Panda on Tuesday said that banks have to give product options to their customers and no mis-selling or force selling should happen. He opined that the Bima Sugam platform could help resolve the mis-selling menace to an extent.
Speaking at the State Bank of India’s (SBI’s) Annual Business & Economic Conclave, Panda said that the bancassurance channel is a very useful, low-cost channel but of late a lot of ills have crept into the system. He asked banks to focus on their core business of lending.
“I believe that there is merit in this (bancassurance) system, but we have to do it with care and caution so that you don’t forget your activity and only start selling insurance,” he said.
Panda said that all the stakeholders will have to sit together and work on restoring confidence in the insurance system.
Bima Sugam would be a digital platform showcasing insurance products for the customers to choose from connected with Aadhar, account aggregator framework and the UPI. Buying, selling and claim servicing would be done through Bima Sugam, said Panda.
On Monday, Sitharaman too had advised lenders to deter from selling insurance and instead focus on core banking. “I wish to say this for the due consideration of the bank boards, sale of insurance by banks has raised concerns of instances of mis-selling and I would say this has contributed indirectly to cost of borrowing for the customers. So, banks will have to look at this, look at their core banking activities and not burden customers with insurances they don’t require,” Sitharaman had said.
