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Our Bureau

Mumbai , Dec 20

Union Bank of India will be the third partner in the three-way life insurance venture with Bank of India and Japan-based Dai-ichi Mutual Life Insurance.

In a notice to the BSE on Wednesday, Union Bank said that the MoU would be signed on Thursday.

According to sources, Union Bank will hold 26 per cent stake in the venture.

Bank of India will be the majority partner with 51 per cent equity. The initial capital required for the venture is Rs 150-170 crore.

A clear picture will emerge after the MoU is signed, a bank official said. Operations are likely to begin after a year, he added.

Earlier, Andhra Bank was supposed to be the third partner in the venture, but it backed out over a disagreement on equity sharing.

Union Bank and Bank of India recently tied up with IDFC for loan syndication.

A few nationalised banks, which have announced three and four way ventures for life insurance, are: IDBI Ltd, Fortis and Federal Bank; Punjab National Bank, Principal Insurance, Vijaya Bank and UK Paints (formerly Berger Paints) and a non-life insurance venture by Allahabad Bank, Sompo of Japan, Indian Overseas Bank, Karnataka Bank and the Dabur group as partners.

Canara Bank has also expressed its interest in entering the field and is currently holding talks with a few overseas life insurance players for 26 per cent stake.

More Stories on : Life Insurance | Public Sector Banks

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