The bank has also got in-principle approval from the market regulator Securities and Exchange Board of India (Sebi) for starting mutual funds.

"We have obtained permission from the Reserve Bank of India (RBI) for the tie-up with the US-based company. We will apply to the Irda within two weeks," bank chairman MY Khan, said here on Sunday. A separate entity would be created for the life insurance joint venture, he said, adding, that the bank was also in the process of distributing non-life insurance products for which talks were still on.

Banking sources said the bank had tied up with Metlife with a maximum permitted equity of 26 per cent for the foreign insurance company, with J&K Bank holding 25 per cent and the rest would come from strategic investors.

J&K Bank would bring in the initial paid-up capital of Rs 100 crore as stipulated by Irda. On the mutual funds front, Mr Khan said, "We are yet to finalise the modalities and will come out with products in a period of two months for which personnel will be drawn from within the system." (PTI) He said a depository service would be opened here for providing demat facilities in equity markets, apart from opening three more branches.