Calcutta, June 26: The Federal Bank is set to enter the life insurance business in joint venture with IDBI and Fortis of Belgium.

The bank’s chairman-cum-chief executive officer M. Venugopalan said, “We will sign the memorandum of understanding for the joint venture in a week.”

The Kerala-based bank will pick up a 26 per cent stake in the venture. “Fortis will own 26 per cent and the remaining 48 per cent will be with IDBI,” Venugopalan said.

“Though the initial capital of the joint venture has not been finalised yet, it is likely to be between Rs 100 crore and Rs 150 crore. Fresh capital will be pumped in by the shareholders when required and in keeping with the growth in business. We are looking at a capital base of Rs 600 crore for the company five years down the line with The Federal Bank’s share at Rs 150 crore, growing at an annual rate of Rs 30 crore,” Venugopalan said.

The private sector bank will also expand its branch network outside Kerala. “This year, we will set up 30 branches, taking the total to over 500 from 472. In three years, we want to have 750 branches across the country,” Venugopalan said. “We want to increase our presence in Karnataka, Tamil Nadu, Maharashtra, Gujarat, Rajasthan, Delhi and Punjab & Haryana ? in that sequence,” he added. As of now, 330 branches are located in Kerala. The bank also plans to set up a representative office in Abu Dhabi, its first outside India, and set up a subsidiary in joint venture with a local bank in the West Asian country.

Venugopalan is optimistic of bagging Kurundwad, Maharashtra-based Ganesha Bank. The Reserve Bank had put Ganesha Bank under a six-month moratorium and prepared a scheme of its amalgamation with the Federal Bank.