Bank of Baroda on Thursday expressed hope that it would get the Reserve Bank of India's permission to foray into life insurance business this year.

"This year, we are hopeful that the RBI will grant us in-principle approval for entering the insurance sector. After getting the RBI approval we will approach the Insurance Regulatory and Development Authority for starting operations in 2004-05," BoB chairman P S Shenoy said in a videoconference from Baroda.

Public sector banks like BoB, Punjab National Bank and Vijaya Bank were planning to enter the insurance business since 2001.

While the State Bank of India was allowed as an exception, RBI put on hold the proposals of BoB.

Other private players like ICICI Bank, Housing Development Finance Corporation, Vysya Bank and Jammu & Kashmir Bank have already forged joint ventures with foreign players and started their insurance business.

Subject to the RBI approval, he said, the bank intends to hold 74 per cent initially in the life insurance venture while offering 26 per cent to a foreign partner.

"We will offload 23 per cent to an Indian partner subsequently," he added.

DSP Merrill Lynch is advising the bank on the insurance foray and selecting the partners, he said.

"We have shortlisted 3-4 foreign players," Shenoy said without giving the names.

BoB may also consider foraying into the general insurance business after entering the life insurance segment.

The bank has also kept options open for inducting a strategic partner in its mutual fund arm.