Question

Should banks be allowed to sell insurance in their branch networks? Critically explain why you agree or disagree with the proposal.   

Answer 1

I disagree with the proposal because If banks are allowed to sell insurance to its clients, there will be conflict of interest and bank has a fiduciary duty towards its clients. For eg:Bank knows that one client has recently inherited huge money. Bank knows if they will create threat in the mind of that client; the client will definitely buy the insurance plan which is more profitable for the bank to sell and not the one which is useful for the client. This can cause lack of trust across banking industry in future.