The bank's board of directors, at its meeting on June 13, decided to set up an insurance company to undertake the insurance business as and when the government comes out with the guidelines.

Incidently, the founder of United Western Bank, the late Annasaheb Chirmulay, was also the founder of the Western India Life Insurance Company, which was nationalised in 1956. The bank has intimated its decision to enter the insurance business to the Bombay Stock Exchange.

Finance minister Yashwant Sinha had announced in the 1998-98 Union budget that the Indian private sector companies will be allowed to enter the insurance business. But, the government is yet to come out with the details of private sector participation in the insurance sector.

The United Western Bank, based at Satara in Maharashtra, was founded in 1937 and has a paid-up capital of Rs 30 croreand a capital base of Rs 137 crore, including the reserves and surplus. The bank has majority of its branches in Maharashtra, followed by Madhya Pradesh, Gujarat and Karnataka. It reported a net profit of Rs 21.58 crore in 1996-97 and had a deposit base of Rs 2,043.74 crore as on March 31, 1997.

The only other Indian bank that has formally announced its plans to enter the insurance sector is State Bank of India, the country's largest commercial bank. Bank of Boroda and Bank of India are also drawing up plans to enter the sector.

Financial institutions like ICICI, IDBI and HDFC have announced their plans of setting up insurance companies. Besides, a host of Indian corporate houses have aired their intentions of entering the sector. However, their plans are based on the assumption that they would be able to draw on the technical expertise of foreign insurance companies.