South African insurance group Discovery has secured the go-ahead from the Registrar of Banks in South Africa to launch a retail bank.

The insurer will now have a year to fulfill several conditions before obtaining a full licence from the regulator.

The group announced plans to set up a retail bank in September 2015 that would cater to both retail customers and small businesses.

It said at the time that it would use ZAR1.3bn ($94.2m) to increase its stake in its credit card business DiscoveryCard to about 75% as a first step. DiscoveryCard, a joint venture with the FirstRand Group, has a customer base of over 250,000.

Discovery was set up as a private health insurer in 1992, following which it has expanded into investments, credit cards, life insurance and property and casualty cover.