IDBI Bank is reportedly considering offloading a 20% stake in its life insurance JV for INR8bn ($120.63m) to its partner and insurance company Ageas.

IDBI Bank owns a 48% stake in the JV IDBI Federal Life Insurance, while Federal Bank and Ageas both own 26% each.

The process to divest is likely to commence in January, according to market reports.

The recent development follows the government of India’s announcement to increase the foreign direct investment in the insurance sector to 49% from 26% in March this year.

The policy change has helped the foreign companies to raise their stake in domestic ventures, with Axa, Nippon Life and Tokio Marine have already announced such plans.