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The Union Finance Minister Nirmala Sitharaman and IRDAI Chief Debasish Panda expressed concerns over mis-selling of insurance policies by banks.
They were speaking at the SBI Banking & Economics Conclave 2024 recently.
The Finance Minister said that while banks have played a significant role in increasing the penetration of insurance in India, it has also raised concerns about instances of mis-selling. In fact, it added in an indirect way to the increased cost of borrowing to the customers. She said that banks should focus on their core activity of mobilizing deposits and lending money.
Talking about the role of banks as an intermediary, Panda said that many people have an inherent trust in the banking system and banks should not mis-sell insurance policies to their customers. He said that banks are older than the insurance industry. However, banks should work in the best interests of customers by giving them multiple options. They should not mis-sell or force-sell insurance policies, he added.
The IRDAI chairman said, “When we buy insurance, banks are the ‘go to’ choice for many. People expect that banks will sell the right product at the right price. While the banca channel is useful, of late, a lot of ills have happened in the system. We all need to sit together and thrash out the matter so that we restore customers’ confidence in us.”
