Japan’s Nippon Life Insurance Company (NLI) has signed a pact with Anil Ambani-led Reliance Capital Ltd (R-Cap) to expand their existing partnership in the Indian insurance space to other financial services, and explore the possibly of applying for a banking licence in future, as per a press release. This comes during the Prime Minister Narendra Modi's first official visit to Japan.
R-Cap is planning to set up its own bank which will cover inter alia the individual customers and the small and mid-size enterprises in India. The company had applied for the new bank licence last year and was among the 26 firms which applied to enter the banking sector. Eventually, RBI issued only two in-principle licences to IDFC Ltd and Bandhan Financial Services Pvt Ltd in April 2014.
"NLI is also participating in this bank project as part of strategic business alliance with a view to improve the financial infrastructure and contribute towards economic growth of India," said Yoshinobu Tsutsui, president, Nippon Life Insurance.
"As a good role model of business partnership between Indian and Japanese corporations, Reliance Group and NLI Group will actively further expand their collaboration, which will contribute towards strengthening the relations between India and Japan,” said Amitabh Jhunjhunwala, group MD, Reliance Group.
The Japanese insurer already owns 26 per cent stake in Reliance Capital Asset Management and Reliance Life Insurance Company for which it invested $290 million and $680 million in 2012 and 2011, respectively.
Nissay Asset Management (NAM), a part of NLI Group, also announced two short-term- Indian Bond Fund and India Equity Selection Fund - for the Japanese retail investors, in partnership with Reliance Group. Both these funds will be managed by NAM while RCAM will be the investment advisor to the funds.
The India Equity Selection Fund will directly invest in Indian equity markets to capture the long-term growth prospects of the Indian economy while the Short Term Indian Bond Fund will largely invest directly in permitted Indian government securities and local currency Indian Corporate bonds.
NLI, as part of its strategy to enhance investments outside of Japan, have invested substantially in the Indian equity funds (since October 2012) and bond funds (since 2013) through RCAM.
(Edited by Joby Puthuparampil Johnson)