The State Bank today said its general insurance foray, in a joint venture with Insurance Australia Group (IAG), will commence operations in the first half of next year.
Both the companies have together invested over Rs 650 crore into the venture. While SBI has put in Rs 111 crore towards its 74 per cent share in the venture, IAG has invested Rs 542.10 crore for 26 per cent of the share capital of the joint venture, SBI General Insurance, SBI said in a filing to the Bombay Stock Exchange.
"The general insurance subsidiary is expected to commence commercial operations in the first half of the calendar year 2010, subject to final approvals from the Insurance Regulatory and Development Authority (IRDA)," the SBI filing said.
In November 2008, both the companies had entered into an agreement to set up a general insurance subsidiary.
IAG in a statement said the investment would be funded from internal resources. "The capital has been invested directly into the joint venture vehicle and no further capital is expected to be required until at least the fourth year of operation," it said.
IAG will initially hold 26 per cent in the joint venture, the maximum permissible under the existing rules, with an option to increase its stake to 49 per cent, subject to regulatory approvals.
Shares of SBI were trading at Rs 2,336, down 0.76 per cent in the late afternoon trade on the BSE.
