HSBC signed an agreement for an insurance joint venture with two state-owned Indian banks, gaining access to more than 40 million customers in an expanding market. The bank will hold a 26 per cent stake in the joint venture – the maximum permissible for an overseas partner – while Bangalore-based Canara Bank will take a 51 per cent stake and New Delhi-based Oriental Bank of Commerce a 23 per cent stake. Canara HSBC Oriental Bank of Commerce Life Insurance Company will be capitalised at INR3.25 billion ($80 million). HSBC, which has only 47 branches in the country, is to pay a INR1.25 billion premium. It will contribute INR1.77 billion, while Canara will contribute INR1.02 billion and Oriental INR460 million. "The prospects for India's insurance sector are good on the back of expected buoyant economic growth and rising levels of wealth in society," HSBC group chairman Stephen Green said. Annual premiums have doubled to more than $20 billion since 2000, when private insurers were first permitted to compete with state-owned insurers, driven by the absence of social security and historic low penetration. The joint venture will have access to more than 40 million customers and a nationwide sales network of 3,600 branches throughout India. "The new insurance company aims to fulfil the needs of high net worth individuals, professionals, small and medium enterprises, farmers and also rural and semi-urban masses," Canara chairman M B N Rao said. In March, Canara announced a joint venture with Dutch asset manager Robeco to develop the bank's existing asset management arm.