Allahabad Bank looks to sell stake in general insurance JV Sompo

Allahabad Bank on Monday said it may partially or completely divest its stake in the insurance joint venture Universal Sompo General Insurance (USGI).

USGI is a public-private venture with Allahabad Bank holding 30% along with Indian Overseas Bank owning 19%, Karnataka Bank (15%), Dabur (10%) and Sompo Japan Nipponkoa Insurance Inc with 26% stake.

In a regulatory filing, Allahabad Bank said its Board of Directors will meet on December 4 in which it may deliberate on partial/complete disinvestment of its stake in USGI.

The board will consider appointment of consultant on Friday for advising redrafting of existing shareholders agreement in the joint venture, Allahabad Bank said.

"To consider according approval to float Request or Proposal (RFP) for appointment of consultant for advising and undertaking redrafting of existing shareholders agreement forming insurance joint venture of bank namely Universal Sompo General Insurance Company Limited so as to align the same with amended Indian Insurance Laws," it said in the filing.

Also read: Allahabad Bank Q1 net up over 30% on trimmed NPAs; Allahabad Bank cuts lending rate by 0.3%​

Indian government earlier in July this year allowed the foreign investors to up their stake in the Indian insurance joint ventures to 49% from the earlier 26%.

The hike in foreign investment limit into the insurance sector is expected to attract long term capital, besides improving the overall investment climate.