The insurance leader, Life Insurance Corporation (LIC) of India has signed a pact with the public lender Punjab National Bank (PNB) in order to allow the latter's customers to reach out to a range of products offered by the insurer.

LIC has already entered into an agreement with 31 banks through corporate agency model and with banks through referral model in order to offer its insurance and investment products.

As per the agreement PNB would distribute LIC's products through its 4,000-plus branch network across the country.

The agreement between the parties was signed by LIC Chairman T. S. Vijayan and PNB's Chairman and Managing Director K. C. Chakrabarty.

Speaking at the launch, Chakrabarty said that PNB does not plan to cut the lending rates further. "We are already aggressive on PLR (prime lending rate) cut but have no immediate plans," he said.

He said that once they reduce the deposit rates, lending rates will have a scope for further reduction. "The government is giving 8 percent on the post office savings schemes, so I cannot go down below that. But removal of certain structural bottlenecks like cross-subsidization of interest rates could help in the reduction of prime lending rates," he added.

The current economic slowdown has prompted the life insurers to enter into the selling of insurance through a bank's established distribution channels.

The housing finance subsidiary of LIC, LIC Home Finance (LICHF) has recently cut its home loan rates by 75 basis points to 10-10.5%.