In India, most bankers push clients to buy insurance or mutual funds. Is this acceptable practice?



It seems that when you walk into a bank, either to open an account, or to open safe box, the manager pressurises you to take up insurance policies or to buy mutual funds with their insurance company. Is this acceptable? They say that they are given targets to meet. Does this not confuse the role of a banker and an insurance agent? Is this healthy for the banking industry?

In India, most bankers push clients to buy insurance or mutual funds. Is this acceptable practice?
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6 Replies to “In India, most bankers push clients to buy insurance or mutual funds. Is this acceptable practice?”


  1. Certainly not. The customer should not be compelled to take insurance policy /mutual funds. The Banks are free to propagate their schemes but not to insist to purchase the same. It is not a healthy practice. Though the interest charged by Public Sector Banks on Home Loans are as per RBI norms, the purchase of Insurance policy/mutual funds add to the cost of funds and increase interest/EMI. At the same time, it is advisable to go for insurance policy of the Home Loan borrower, so that the family will not be put to difficulty, if some thing happens. The policy premium should be reasonable and competitive to LIC. The Banks can consider to provide free insurance cover to Home Loan borrowers, since the interest paid on Home Loans almost equal to the loan amount.


  2. LIC does not need any marketing. Their agents are welcomed without any scepticism due to its capacity to meet the commitments.

    In the present Corporate environments the future of Private Life Insurance Companies are not certain.
    while they present a rosy picture at the time of proposal, most of the Insurance Companies(including Nationalised General Insurance Companies) try their best to be casual in handling their claims.The insurance product is added as an additional avenue by the Banks to earn and show a positive Balance.


  3. i think selling insurance just for completing target should be consider as crime because most of time they sell a product which is not at all useful to costumer.

    One can Invest in mutual funds through SIP and MIP don’t invest in bulk


  4. This is really bad practice which is observed in banks as they sell the products with only intention to meet the given targets and in this process they are ignoring the need of that client
    Insurance or mutual fund products needs more professional approach when selling and more so if they concentrate on requirement of that client and then suggest that will actually good for both the parties.(win-win situation)


  5. Insurance is subject matter to solicitation if any try to pushing in spite of request then its breach to concept of insurance selling. Its not acceptable.





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