Country's largest lender State Bank of India on Monday said it has entered into a joint venture with Insurance Australia Group (IAG) for its foray into the general insurance business.

State Bank will be holding a 74 percent stake while the balance 26 percent will be held by IAG, subject to the Reserve Bank's approval.

Regulatory authorities would be approached for the necessary approvals and the company hopes to commence business in the next financial year, SBI said in a statement.

SBI Chairman O P Bhatt said that the joint venture is a part of the bank's strategic initiatives to retain its position as the pre-eminent financial services group in the country.

"Insurance penetration in India is very low and the general insurance industry is expected to grow at a brisk rate of 15-20 percent per annum over a period of next 10-years," Bhatt said.

"SBI, with its unparalleled brand equity and extensive distribution network will be able to provide protection to people even in the far-flung rural and semi-urban areas throughout the country and help deepen the market," Bhatt added.

With this foray, the bouquet of financial products offered by the SBI Group ensures its footprints in every area of financial services, the statement said.

The bank is already offering life insurance products through its subsidiary, SBI Life Insurance Company.

IAG's Managing Director and Chief Executive Officer Michael Wilkins said that the joint venture was a significant step in IAG's strategy to pursue select international general insurance opportunities.