Life Insurance Corporation of India will sign an agreement with joint venture partners by this month-end for launching the credit card business by the first week of September. The launch was earlier scheduled for March 1.

LIC [Get Quote] would float a joint venture company called LIC Card Services in accordance with RBI guidelines. The central bank requires the formation of a new registered entity before a foray into the credit card business.

The payment gateway could be either Visa or Mastercard. LIC is engaged in talks with both, according to a senior company executive.

LIC would own the largest stake in the JV, around 40 per cent, followed by GE Money India at 30-35 per cent. The insurer had signed a memorandum of understanding with GE Money India, Corporation Bank [Get Quote], LIC Housing Finance and LIC Mutual Fund in September last year to create a credit card company.

Some loose ends would have to be tied up before the credit cards are finally launched, explained LIC executives. The software have to be upgraded to enable this additional service.

LIC has already linked its 2048 offices across the country through a software network to provide multi-city facilities to its customers and is in the process of checking the software platforms.

LIC is also fine-tuning the channel networks and merchant establishments that would support the marketing of its credit card. LIC would offer the facility of unsecured loans against the credit card. It would also allow policy premiums to be paid through its own credit card.

The insurance company has a database of 19 crore (190 million) policy holders and aims to add around 1 crore (10 million) customers in three years. It is confident of having a network of 32 crore (320 million) policy holders by 2011.

It has 14 lakh (1.4 million) agents and is adding 150,000 every year. The agents are being trained for selling health insurance plans as well as credit cards.