UPDATE 1-State Bank of India, Australia's IAG in insurance JV

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MUMBAI, May 13 (Reuters) - State Bank of India (SBI.BO: Quote, Profile, Research), the country's top lender, and Insurance Australia Group (IAG.AX: Quote, Profile, Research) have signed a memorandum of understanding for a general insurance venture to tap the fast-growing Indian market, the firms said on Tuesday.

The firms will finalise an agreement and apply for regulatory approvals, they said in a joint statement, without specifying financial details.

SBI will hold 74 percent in the venture, with IAG holding the remaining 26 percent, the maximum allowed under Indian law.

"Establishing a general insurance joint venture is a key element of SBI's strategy to pursue emerging, high-growth opportunities," Deepak Chawla, SBI's deputy managing director for corporate strategy, said in a joint statement.

The venture hopes to start business in the current financial year and aims to be "amongst the top three players in general insurance in a period of about 10 years," the statement said.

State-run SBI, which has more than 10,000 branches and 100 million customers, has a venture with Cardiff, a unit of BNP Paribas (BNPP.PA: Quote, Profile, Research), for life insurance.

"Forming a general insurance partnership in India ... is a significant step in IAG's Asian expansion strategy," IAG Chief Executive Michael Hawker said.

"We identified India four years ago as a market we wanted to enter as part of our stated strategy to diversify into fast-growing general insurance markets in Asia," he said.