State Bank of India and France-based Cardif are expected to infuse additional capital of about Rs 50 crore (Rs 500 million) in their life insurance joint venture by 2004-05.

"We may require further capital by the next fiscal," R Krishnamurthy, managing director, SBI Life, told PTI in New Delhi.

The 74:26 joint venture between SBI and Cardif, which started operations in 2001, has a total paid-up capital of Rs 125 crore (Rs 1.25 billion).

Asked to what extent both the partners would have to pump in additional capital, he said a review would be taken up to assess the requirements, but declined to spell out the exact amount needed.

However, indications are that SBI Life, which recently launched a NRI product Sethubandhan, might require about Rs 50 crore additional capital.

The move is in line with Insurance Regulatory and Development Authority's prudential norms on the solvency margins and capital adequacy.

He said since SBI Life was concentrating on group insurance products, their average cost of underwriting was lower as compared to other players' highly capital intensive products.

"There is no need for any capital for this year," he said.

Asked about group insurance, Krishnamurthy said very soon SBI Life would offer coverage to all employees of the Howrah Municipal Corporation.

SBI Life has roped in regional rural banks to sell its insurance products, apart from using the parent's strong network of about 9,000 branches, including that of its seven associate banks.

Industry sources said SBI Life had a definite edge over other new generation insurers, especially in the rural sector where personal savings were higher than that in the urban areas, because of the parent bank's reach and tie up with the RRBs.

SBI Life's group products include Super Suraksha, which provides pure life insurance cover at low cost and Swarna Ganga, which combines security and tax-free savings.

"Whether it is a small business with 50 employees or a top rung corporate, we will design and provide individualised group term insurance packages based on the company's needs," sources in SBI Life said.    

Coverage schedules and amounts could be customised to take into account salary, employee classification, or other criteria, they said.