The conglomerate of these banks will hold 74 per cent, while the remaining 26 per cent will be given to a foreign partner.

This is for the first time that some of the banks are coming together to undertake non-life business while the country's largest bank State Bank of India, Canara Bank, Andhra Bank are planning to enter the life sector.

Allahabad Bank chairman and MD B Samal told The Financial Express soon after the board meeting to approve the proposal that the joint venture would have a natural advantage as it had a wide base through its four participants.

``We may enter life sector later,'' he said adding that his bank would have an equity participation to the extent of 18-20 per cent. The total capital requirement of the company would be decided soon, he added. They would soon approach the Reserve Bank of India (RBI). Subsequent to the RBI's nod, the JV company would obtain the Insurance Regulatory Development Authority's approval.

Pointing to the logic of the four banks coming together for floating the insurance venture, Samal said this had been dictated by the regional strengths of the banks. The collective networth of the four banks is estimated to be over Rs 5000 crore and each bank had its strong base in its respective region and this would provide a wide coverage in the country, Samal explained.

``We can take on the existing player and new players from day one,'' he said.Also, for a bank to participate in the joint venture, as on March 31, it should have a net worth of not less than Rs 500 crore, a capital to risk weighted assets ratio of not less than 10 per cent, the level of non-performing assets should be reasonable, should have a net profit record for the last three continuous years and the performance of subsidiaries, if any, should be satisfactory.