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Mr Janki Ballabh, SBI Chairman, Mr N. Rangachary, IRDA Chairman, and Mr Deepak Satwalekar, MD and CEO, HDFC Standard Life Insurance, at a seminar in Hyderabad on Friday.

HYDERABAD, Aug. 30

The Insurance Regulatory and Development Authority (IRDA) has asked the financial institutions, banks, mutual funds, insurance companies and the postal department to submit their tariff structure for the entire process of administration of pension funds in case they were to be allowed to participate in the pension funds market.

Disclosing this at a national seminar on pension with a special focus on India here on Friday, the IRDA Chairman, Mr N. Rangachary, said while the response from the Association of Mutual Funds of India (AMFI) was encouraging with their quotation between 75 basis points and 175 basis points, the Indian Banks' Association (IBA) failed to respond to the issue despite repeated reminders.

Stating that the financial institutions, banks, mutual funds and insurance companies with vast network and reach were well suited to participate in the pension funds market, Mr Rangachary advised the banks to run pension funds as value-added service to their customers while settling for nominal returns from this business. He also advised the IBA to match with the quotation of AMFI on the issue.

Both the Chairman of State Bank of India, Mr Janki Ballabh, and the Chief Executive Officer of HDFC Standard Life, Mr Deepak Satwalekar, stressed the need for exploring the unorganised sector for pension funds through alternative distribution channels such as non-governmental organisations and trade unions, in addition to utilising the existing vast network and resource pool of banks and other financial sector intermediaries.

Mr Satwalekar favoured public-private participation model for pension funds, involving both the State and the private players, in addressing the rural markets. The benefits can be reaped by leveraging the vast network and asset base of the banks and institutions, he said.

Allaying apprehensions on whether Indians would receive pension funds with long tenures, Mr Janki Ballabh said the people in the country already had enough exposure to insurance products with long tenures and hence selling pension products in the country should not be a problem.

However, admitting that selling pension funds was a different ball game compared to insurance products, he said the banking staff requires to be suitably trained.

The IRDA Chairman said the costing and credibility of the fund managers was going to play a crucial role in the success of creation and development of pension funds market in the country.

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