State Bank of India (SBI), the country's largest lender, is expected to finalize the terms for General Insurance joint venture with Insurance Australia Group (IAG), a well-known international insurance major by next month.

The bank is presently working on the structure of the joint venture agreement, which it expects to finalise by September, this fiscal.

SBI expects that the new company will get operational in the next three to six months, once a mutual agreement is reached. However, SBI declined to divulge the financial terms and management structure of the proposed joint venture company.

In May, 2008 both parties had signed an agreement to form a new company for the proposed insurance business. State Bank (SBI) proposes to hold a 74 per cent stake in the joint venture with IAG the remaining 26 per cent, subject to regulatory approvals.

IAG has operations in Australia, New Zealand, Thailand, Malaysia, China, Singapore and the UK through various brands. It employs more than 16,000 people of which around 11,000 are in Australia. The firm has a good presence in major segments of the general insurance market.

SBI's entry into general insurance is expected to create challenges to existing public and private sector players.

Apart from general insurance, SBI Life Insurance, a joint venture between State Bank of India (SBI) and BNP Paribas Assurance, is now looking to foray into overseas market next fiscal by targeting Indian expatriates in the Middle East countries for selling insurance products.    

The company has plans to open 250 new branches this year, besides doubling the headcount of insurance advisors in 2008-09. Presently it has 180 branches and 43,000 agents.