Banks are being nicely ‘co-erced’ by RBI to become brokers. This sounds like a joke – when IRDA asked for it, RBI said ‘no. they can only be agents.’

Now suddenly IRDA and RBI will think of this as a great move. That is exactly how regulators work. First they have to ensure that the industry which they regulate remains alive. Please remember SEBI is the capital market regulator, so it may not mind killing a part of its domain. Like it is trying with the mutual funds -but hey this is a different topic.

If banks become brokers, they are acting on behalf of the customer. This is the theory that RBI believes. If that is so RBI needs an overhaul. Big time. And right now. Raghuram Rajan if by making all the banks Insurance brokers instead of Insurance Agents, we are expecting to STOP mis-selling of insurance by banks, I can fly.

Typically an ‘A’ bank which is currently selling the policies of a ‘M’ insurance company will go to ALL other life/general insurance companies and negotiate the commission rates. If the regulator does not know that this is happening and will continue to happen, well, I am NOT surprised. That is the regulators prerogative to believe that.

We at the ground level have seen this happening in Mutual funds, and we know it is HAPPENING even NOW in case of National distributors and big brokers. Now banks too will join the process. Awesome.

The real beneficiary will be the bank, and perhaps some employees. The loser will be the uninformed or illinformed customer, and NO, I am not shedding tears for him or her. Recently saw a FRAUD where the client’s signature has been forged, and the police calls it ILLEGAL,,,,but the client has NOT GOT HIS MONEY….Company is saying ‘sorry, but 15 days are over’. LOL. really rofl.

Any guesses why is this happening?

Simple. This way LIC will force all banks to EMPANEL with them and sell their policies. Remember LIC is ┬ábig time shareholder. So Hdfc Ltd will not be able to resist LIC pushing Hdfc bank, similarly all banks will be ‘coerced’ to sell LIC policies.

Who benefits? LiC of course.

But with all the money what will LiC buy? Govt. securities. ha! so now u get the drift….

MORALS: – Gujarati saying: “Raja bane Vyapaari, to Praja bane bhikari” – our government is doing it well.

second: “The Regulator speaks in the tone and voice of its MOST POWERFUL player”



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  1. Incidentally, many banks ask customers to subscribe to some crazy insurance policy if all they are looking for is just a locker facility. Axis bank, for instance, has been trying to push Max Life Gain Plus…A senseless policy for the customer.

  2. hi sir recently I saw your blog. it is very much informative and educated. I am working in govt sector at junior level. I am very much interested in investment blogs like yours. thank you sir

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