Liberalization, privatization and globalization have brought many changes around the world. These changes are also seen across the financial markets of the globe as it has enabled opening up of the economy, easing the existing regulations and bringing new products and services through innovations. Indian financial system is no exception to such changes. The number of new financial instruments and new financial services has increased over a period of time. These outputs due to financial innovations have helped the financial intermediaries to cope with competition, reduce and manage the risk involved in business, and stabilize their earnings. One such financial innovation is bancassurance that has brought many changes in the performance of the Indian banking sector. Bancassurance is the marketing of retail insurance products to a commercial bank’s client base. Bancassurance is a simple method of banks distributing insurance products. Thus, many financial products and services are provided on the same platform (Kumar, 2000; Benoist, 2002; and Davis, 2007). Bancassurance is found to be reliable (Choudhury and Singh, 2015a) and responsive (Choudhury and Singh, 2015b). It is also found that customers have favorable experience from bancassurance channel (Choudhury and Singh, 2015c). Hence, this study makes an attempt to investigate if bancassurance as a financial innovation in the Indian banking system has contributed to improving the performance of banks.
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