The Reserve Bank is likely to soon issue guidelines to allow banks to act as insurance brokers with a view to boost business and arrest decline in insurance penetration. Agencies quoting a senior central bank official said, the RBI is likely to finalise the norms by next week. The notification will be issued thereafter.

Under the existing guidelines, a bank can act as a corporate agent and sell policy of one life insurer and one non-life insurance company. The new guidelines seek to allow banks to act as a broker permitting them to sell insurance policies of different insurance companies.

Finance Minister P Chidambaram in his Budget speech (2013-14) had said, banks will be permitted to act as insurance brokers so that the entire network of banks’ branches will be utilised to increase penetration of insurance.