This paper examines the impact of the acquisition of an insurance company on a bank’s financial performance in the light of the acquisition of Metlife India Insurance Co. Ltd. by Punjab National Bank (PNB). The paper aims to study (a) whether positive or negative cumulative excess returns have accrued to PNB shareholders during the acquisition announcement; (b) whether there is any improvement in the financial and operating performance of PNB because of acquiring an insurance company; and (c) what are the reasons for the improvement or deterioration in the performance of the banking and insurance firms that opt for M&A. The present study uses CAMEL model and regression analysis for analyzing the three-year average performance before and after the bancassurance for the period of study, i.e., 2008 to 2014. The results reveal that in the short run, the indifferent behavior shown by the stock market is the cause of concern for the bank. The bank should take appropriate measures to disseminate the information with respect to its acquisition of an insurance company to its investors. But in the long run, the impact of the acquisition of an insurance company is felt on the bank’s financial and operating performances.