Bank of Baroda is keen on having a common strategic foreign partner for both its mutual fund and the proposed life insurance venture.

The bank's board had already given an 'in principle' nod for venturing into the life insurance business and it is awaiting clearance from the Reserve Bank of India.

BoB was on the look out for "a common strategic foreign investor" for both businesses, but it was dependent on the banking regulator's nod for the insurance foray, sources in the bank told PTI in New Delhi on Thursday.

BoB officials declined to comment on the partner they are looking for and the equity to be divested in the mutual fund. The bank's foray into the insurance business had been hanging fire for the last few years.

The public sector bank, which has assets over Rs 760 crore (Rs 7.60 billion), might enter the pension sector as well with the government already approving opening up of the sector and setting up the Pension Fund and Regulatory Development Authority.

BoB has four subsidiaries -- BoB Housing Finance, BoB Asset Management Company, BoB Capital Markets and BoB Cards -- whose combined profits stood at Rs 11.48 crore (Rs 114.8 million) during 2002-03.

Of the subsidiaries, only BoB Capital Markets had posted losses in 2003.

With several financial products, the sources said the bank was in a position to move towards universal banking.

Also, with shrinking margins and pressures on the interest rate spreads, they said it had become imperative for the bank to diversify into areas like insurance and pension.