Volkswacht Bodensee - Bandhan Financial weighs health-insurance entry after acquisitions settle

Bandhan Financial Services plans to consider entering health insurance after stabilising its recently acquired mutual-fund and life-insurance businesses.

Bandhan Financial Services, part of Bandhan Group, will explore opportunities in the health insurance sector once the recent acquisitions of a mutual fund company and life insurance companies stabilise, its chairman Chandra Sekhar Ghosh stated.

The acquisitions of IDFC Mutual Fund, IDFC Asset Management Company and Aegon Life Insurance were carried out by Bandhan Financial Services Limited (BFSL) subsidiary Bandhan Financial Holdings Ltd (BFHL), which is also the promoter of Bandhan Bank.

BFSL, along with other investors, acquired IDFC Mutual Fund in 2023 and took over Aegon Life Insurance subsequently in 2024.

The immediate focus is towards consolidating existing businesses before taking up further expansion opportunities, he told PTI in an interview.

The group has a strategic plan to enter new businesses, but it is not yet the right time to indicate when it would foray into health insurance, he stated, describing the sector as a significant opportunity.

Ghosh stated the group had acquired three companies in the past three-and-a-half years, apart from its social-sector operations, and was currently focused on streamlining and integrating these businesses.

"These acquisitions need to be streamlined, and that is the focus currently. It will take time before we move into something else," he stated.

A composite insurance licence would make it easier for the group to explore opportunities in the sector, he noted.

A parliamentary panel in 2024 suggested the introduction of a composite licence for an insurer to undertake life, general, or health insurance under one entity to increase penetration of insurance in the country.

As per the Insurance Act, 1938, and the regulations of the Insurance Regulatory and Development Authority of India, composite licensing for an insurer to undertake life, general, or health insurance under one entity is not allowed.

Beyond insurance, Gosh stated, the group is also looking at potential opportunities in other financial services segments, including investment banking and wealth management, where it does not currently have a presence.

"There are opportunities in investment banking, where we are not present. We are not in wealth management either," he noted.

BFSL is the promoter of Bandhan Financial Holdings Ltd and Bandhan Bank Ltd.

Incorporated in 1995, BFSL is registered with the Reserve Bank of India (RBI) as an NBFC MFI, engaged in microfinance activities since 2009.

Subsequently, with the license issued by the RBI to Bandhan Bank in June 2015, it transferred the entire assets and liabilities of its microfinance business to Bandhan Bank in August 2015 pursuant to the Guidelines for Licensing of New Banks in the Private Sector Banks issued by the central bank on February 22, 2013.

After the business was transferred to Bandhan Bank, BFSL ceased to have any operations and registered itself with the RBI as an NBFC-CIC-ND-SI with effect from September, 2017.

T.Suter--VB