Can the government-run State Bank of India (SBI) become the agent of its own insurance subsidiary SBI Life? This question was raised in a public interest litigation (PIL) before the Lucknow bench of the Allahabad High Court.
“SBI is the promoter of SBI Life as well as its agent. Four nominees of the bank are directors on the board of SBI Life,” advocate Dhruv Kumar, the petitioner, said on Thursday.
Kumar contended that SBI’s arrangement was a “gross violation of the Insurance Act.”
Filed on Monday, the PIL said the arrangement between SBI, the country’s largest lender, and SBI Life was in contravention of the provisions of section 48 of the Insurance Act.
“As an agent of its own company SBI Life, the bank has been exploiting borrowers of the bank and predatorially priced policies are being sold by it,” it said.
The petition also urged the court to direct the Insurance Regulatory and Development Authority to cancel SBI’s corporate agency licence.