The Vishal Group Limited-promoters of Nepal Industrial and Commercial Bank, among others-and India's Life Insurance Corporation have joined hands to enter Nepal's large but virtually untapped life insurance market. The two companies signed a memorandum of understanding in Kathmandu last week and their new company-Life Insurance Corporation (Nepal) Ltd (LICNL)-is to become operational by March next year.

"We hope to sell 10,000 policies in the first year of operation," says GN Vajpai, Chairman LIC India. "The market here is very good because it is not very developed." LICNL will have a paid-up capital of Rs 250 million, of which the LIC will hold 55 percent and the Vishal Group 25 percent. The remaining 20 percent shares are to be sold to the general public. "Our main goal is to provide quality insurance services in Nepal," says Ashok Agrawal, Chairman of the Vishal Group. "I'm confident this venture will bring a new era in the insurance sector."

LIC used to operate in Nepal before the Rastriya Beema Samiti was incorporated in the early 1970s. Its global assets are valued at Rs 2574.9 billion. LICNL, the first joint venture in life insurance, will have to compete with two existing companies and four others that are in the pipeline.