BANGALORE, India (AFP) -British banking giant HSBC Holdings on Monday tied up with Bangalore-based Canara Bank and another Indian lender to set up an insurance business, entering a market that is expanding as incomes grow and life expectancy rises.

State-owned Canara Bank will hold a 51 percent stake in the venture, initially capitalised at two billion rupees, with HSBC taking 26 percent and New Delhi-based Oriental Bank of Commerce the rest, Canara’s general manager S. Jayararam told AFP.

An initial agreement was signed by the three partners in New Delhi on Monday, Jayaraman said in a telephone interview.

London-based HSBC joins global firms such as New York Life, Prudential and Allianz in setting up an insurance venture in the country of 1.1 billion people, whose insurance market has doubled in size since it was thrown open to foreign investment in 2000.

“The insurance penetration rate is still extremely low and there’s a lot of scope for further expansion,” said Jayaraman, adding that the partners are yet to decide on details of the joint venture.