MOTIVATING FACTORS FOR BANKS TO GO FOR BANCASSURANCE AND PROBLEMS

This paper aims to find out the motivating factors for banks to enter into the insurance selling business. In the present study, non-probability sampling has been used. To find out motivating factors and problems associated with bancassurance, two stage sampling has been used. In first stage quota sampling is used where 70 banks from each city finalised for collecting data from banks located in the tricity region, i.e. Chandigarh, Panchkula and Mohali. To fulfil this objective, factor analysis has been performed. Factor analysis revealed that three factors such as i.e. financial benefits, diversification and cost saving, Enhanced productivity and qualified bank staff motivate banks to go for bancassurance business. Additionally, On the other side, factor analysis was also performed to find out the problems encountered by the banks. Two factors were extracted from ten statements and named as Dissatisfied customers and frustrated employees, Conflict of interest and different organisation culture. Regulators of bancassurance RBI and IRDA should contemplate this issue, for smooth functioning of convergence between banks and insurance companies.