New Delhi, Dec 22. (PTI): Public sector Bank of India and Union Bank of India and Japanese insurance major The Dai-ichi Mutual Life Insurance on Thursday signed an agreement to float a life insurance Joint Venture in India.

Bank of India would hold majority 51 per cent stake in the venture, Union Bank 23 per cent and Dai-ichi 26 per cent -- the maximum permitted to a foreign partner under current Government regulations.

The JV firm would have an initial capital base of Rs 150 crore and in the course of time it would be increased to Rs 450 crore.

Union Bank was roped into the venture after talks with Andhra Bank failed due to differences over shareholding pattern.

Andhra Bank is also looking for alternative arrangements, banking sources said.

At least 10 more banks, mostly nationalised banks are in the process of entering into the lucrative insurance sector, which is expanding at a fast pace.

Major banks like Punjab National Bank, Oriental Bank, IDBI and Bank of Baroda are likely to finalise their life insurance foray strategy soon.

The new premium collections by 16-life insurance players were up by over 160 per cent till October this fiscal.