Kolkata, July 29 - American International Group (AIG), the insurance giant bailed out by the US government, has pulled out from a proposed joint venture with National Housing Bank (NHB), a top bank official said here Wednesday.

Earlier, AIG had agreed to pick up 41 percent stake in a proposed mortgage guarantee company in which NHB will have a majority 43 percent stake.

'AIG has withdrawn from talks due to the economic slowdown and so we have started looking for a new partner for the mortgage guarantee outfit,' S. Sridhar, chairman and managing director of the bank, told reporters here.

He said talks are at advanced stage and a new partner would be inducted in the next three-four months.

Asian Development Bank and International Finance Corp had also agreed to pick up 8 percent stake each.

However, Sridhar said: 'There would be realignment in the shareholding of the partners depending upon how much the new partner agrees to pick up.'