"Reliance Capital is planning to set up its own bank, which will cater to the individual customer and small-and-medium enterprises all over India," said Yoshinobu Tsutsui, the president of the Nippon Life Insurance.
"Nippon Life Insurance is also participating in this bank project as part of strategic business alliance with a view to improve the financial infrastructure and contribute towards the economic growth of India," he added.
The decision, announced during Prime Minister Narendra Modi's official visit to Japan, would further expand and deepen the existing relationship between the Indian and the Japanese group in the Indian financial services sector, the two groups said.
Already the Japanese insurer has a 26-percent stake in Reliance Capital Asset Management company acquired for $290 million in 2012 and Reliance Life Insurance Company for $680 million invested in 2011.
The two groups's partnership in the setting up of Reliance Bank is the logical extension of an existing relationship in the financial services sector, they added.
"The Prime Minister's (Narendra Modi's) visit to Japan reinforces the strategic focus of global partnership between India and Japan," said Amitabh Jhunjhunwala, group managing director, Reliance Group.
"As a good role model of business partnership between Indian and Japanese corporations, Reliance Group and Nippon Life Group will actively further expand their collaboration, which will contribute towards strengthening the relations between India and Japan."