BoI life JV to get Rs 500 cr capital

Bank of India (BoI), along with its partners Union Bank of India and Dai-Ichi Insurance, is likely to infuse around Rs 500 crore in the next 6-7 years in a proposed life insurance joint venture.

Bank of India has 51 per cent stake in the life insurance JV, while Union Bank of India has 23 per cent and Dai-Ichi Insurance 26 per cent. Dai-Ichi is a Japan-based insurance company.

The joint venture agreement will be signed on December 6, said a senior official close to the development. "The company will most likely be operational in April," the official said.

Initially, the partners will jointly infuse Rs 150 crore into the venture. The partners are yet to apply for Insurance and Regulatory Development Authority's approval for the joint venture.

Bank of India expects to raise around Rs 1,000 crore by selling 5 per cent equity to qualified institutional buyers, the official said.

Earlier, Chairman and Managing Director T S Narayanasami had said the bank had sought the government's approval to raise 30-40 million fresh shares. However, the state-run bank is yet to get approval from the government for the private placement.

Bank of India's shares have risen 8.3 per cent in the last one month on the news of its private placement.