Max Financial Services on Monday said that its subsidiary Max Life Insurance is ready to pay penalty to Insurance Regulatory and Development Authority of India (IRDAI) but it believes it did nothing wrong.

"With a view to pave the way for the future including strengthening the long-term strategic partnership with Axis Bank and avoid unnecessary and long legal escalations, Max Life has decided to pay the penalty imposed by the IRDAI, while it is of the belief of not committing any wrongdoing," the statement read.

The insurance regulator has imposed penalty on Max Life Insurance for violation of norms with respect to transfer of shares in Axis Bank-Max Life Insurance deal. The penalty of Rs 3 crore has been imposed on Max Life, while a penalty of Rs 2 crore has been levied on Axis Bank.

The total penalty of Rs 5 crore has to be remitted within 21 days, IRDAI said on Sunday.

Axis Bank is the co-promoter of Max Life Insurance Company Limited, following an acquisition of 12.99 percent stake in April 2021 in the private life insurance firm.

Max Finance said that the joint venture draws synergies from Axis Bank’s strong distribution and Max Life’s robust life insurance product offerings.

"Max Life and Axis Bank have shared a successful business relationship for over a decade, providing long-term saving and protection products to nearly 20 lakh customers, aggregating total premium of over Rs. 40,000 crore and over Rs 3.3 lakh crore of sum assured," it said.

Analjit Singh, Chairman of Max Life Insurance, said, “Max Life and its shareholders have always conducted their affairs in compliance with applicable laws and will continue to abide by the same and will work with all earnestness to create value for all its stakeholders. The aforesaid transactions were undertaken in a bona-fide manner. However, keeping the best interest of the company and its stakeholders in mind, we have resolved to remit the payment towards the penalty.”

Further, Axis Bank is committed to its long-term association with Max Life as its promoter and bancassurance partner, Max Finance said.