Insurance regulatory and development Authority (IRDA) has approved the proposals of State Bank of India (SBI) for its non-life joint venture with IAG of Australia, and Bank of Baroda for a life insurance venture with UK insurer Legal and General and Andhra bank.

The final consent to proceed with the operations would be given once the banks bring in the required capital.

SBI had finalised its talks with IAG, formerly known as Insurance Australia group, a year ago but its application to IRDA got delayed due to the economic crisis after the collapse of Lehman brothers.

SBI's step is likely to intensify competition among the industry players as the bank has a distribution network of around 14000 branches and is considered to be a formidable player in auto loans and home loans.

In a similar move, state-owned Bank of Baroda will collaborate with UK's Legal and general and Andhra bank for a life insurance venture. BOB will hold a 44% stake, Legal and General 26% and Andhra Bank 30% in the joint venture.

IRDA is also considering a proposal by Max India for a health insurance joint venture with British United Provident Association (BUPA) of UK. While Max India will hold a 50% in the joint venture, promoter cum Chairman Analjit Singh and his family will have a 24% stake. BUPA will hold the balance 26% equity stake in the venture.

The regulator is also considering allowing banks to tie-up with two to three insurance firms. Currently, as per IRDA guidelines, Banks are prohibited from tying up with more than one insurer.