State Bank of India, a leading private sector lender has announced that it has clinched a pact with Insurance Australia Group (IAG) with the aim to form a new conglomerate which would cater to the general insurance business in the domestic market.

Under the terms of JV agreement, SBI will be the owner of 74 percent stake in the new entity, while the remaining 26 percent will be hold by IAG.

While commenting on the agreement, Mr. O P Bhatt said, "Insurance penetration in India is very low and the general insurance industry is expected to grow at a brisk rate of