"We have increased the paid-up capital of the company by Rs 75 crore (Rs 750 million) to Rs 250 crore (Rs 2.5 billion) to maintain over 300 per cent growth in business achieved so far," SBI Life chief marketing officer S Muralidharan said at the launch of the company's first unit-linked insurance product 'Horizon' in New Delhi.

SBI Life Insurance Co, a 74:26 joint venture of SBI and Cardiff SA, is looking at an investment of over Rs 500 crore (Rs 5 billion) from its promoters to fund business growth and become the second largest life insurer in the country in the next two years.

Cardiff SA may increase its stake if the government hikes the FDI limit in the insurance sector from 26 per cent to 49 per cent, as the agreement between the two joint venture partners allows for equal shareholding, a top company official said.

"We expect SBI Life to become the second largest player next to LIC [Get Quote] in the next two years," Muralidharan said. Currently, SBI group distributes insurance products through 5,000 branches and by March 2006 it expects over 10,000 branches to sell these products.

The bank, with a base of over 10 crore customers, would also enter non-life insurance business soon. The fourth largest life insurance company has covered over 20 lakh lives till date. This number would have to grow to one crore lives every year to attain the second slot.

The insurance JV has reported a gross premium income of Rs 362 crore (Rs 3.62 billion) in the nine months ended December 2004 and expects the first premium income for the financial year 2005 to reach over Rs 600 crore (Rs 6 billion).