Axis Bank, India’s third largest private bank, will be acquiring a 29% stake in Max Life Insurance paving the way for a 70:30 partnership between the promoters of Max Insurance and Axis Bank post the completion of formalities, as per a report in LiveMint. The present shareholding in Max Insurance, is Max Financial Services 72.5% and Mitsui Sumitomo Insurance 25.5%. Of the remaining, Axis bank also held some shares.

Axis Bank has made this announcement and it is expected that the transaction will get completed over several months, with several approvals at stake. Once these formalities are completed, the promoter group led by Analjit Singh will hold 70% and Axis Bank 30% in Max Insurance.

Max Life Insurance Company posted a turnover of ₹19,987 crore in FY-19.

For Axis Bank, this is not a new relationship with Max Insurance. The bank has been selling insurance policies of Max to its 19 lakh customers for over 10 years. The premiums collected so far in all this period alone work out to around ₹38,000 crore.

The leaders of both the firms, Analjit Singh, Founder and Chairman Max Group and Amitabh Chaudhry, MD and CEO, Axis Bank, have issued statements welcoming this development and as a measure of strengthening of each other’s businesses and their respective stakeholders. They expect the current gloom in the economy to disappear and herald better days once this is all over. Max sees more stability in its business and a valuable partner. Though the stakes between the two are not equal, Analjit Singh promises to treat Axis Bank as an equal partner in the business.

For Axis Bank, this is a good opportunity to expand its role in the financial services sector and grow an insurance arm to its banking services portfolio, something that is enjoyed by other top banks like SBI, HDFC and ICICI.