Life Insurance Corporation of India (LIC) has finally decided to partner with Corporation Bank to commence its credit cards foray.

LIC has tied up with Corporation Bank to launch a white labelled/co-branded credit card and has also decided to form a separate wholly owned company "LIC Cards Services Limited" to manage all aspects of its credit card venture. LIC has got an approval from the Government of India to start this wholly owned company.

The set up of this venture will allow LIC to offer premium-payment facility to policyholders with their own credit card. This is likely to reduce the transaction costs for LIC along with adding convenience to its customers.

LIC chairman TS Vijayan said, "We have already sent a proposal to the bank, but are yet to receive any communication from them for our proposed credit card venture."

However an official from Corporation Bank told that the bank will extend its existing credit card facility to LIC by using both Visa and MasterCard. The bank has not yet decided on the nature of the card- co-branded or independent- and the decision on stake between the two partners is also pending said the official.

Currently LIC holds a 27% stake in Corporation bank.

LIC Cards Services Limited will leverage LIC and Corporation Bank's strong brand and extensive branch, ATM, and sales distribution network.

Initially LIC had planned to partner with GE Money but following the failure of their partnership, LIC decided to join with a PSU. Canara Bank was the other option with which LIC was planning to partner for this purpose.