LIC Housing Finance keen to enter banking
12 October 2010
LIC Housing Finance, an arm of Life Insurance Corporation of India, on Monday made a strong pitch to be granted a banking licence.
Speaking to newspersons at an event to mark a distribution arrangement with United India Insurance in Mumbai, LICHF managing director and chief executive officer K K Nair said his company was in a strong position to promote a bank. LICHF, besides being the second-largest housing finance company, also has the advantage of being promoted by Life Insurance Corporation - the country's largest financial institution, with over Rs10 lakh crore of assets.
''If, under the final guidelines (due in December), we are eligible to apply, we will certainly apply for a banking licence,'' said Nair.
''We have given our feedback on the new banking license. We said if financial inclusion was the objective of the regulator, license should be given to one who is capable of penetrating into the market. Secondly, the company should be in a strong financial position and track record in financial market,'' said Nair.
The company is looking at such areas as financial services and venture capital funding. It has applied for a venture capital fund license to the capital market regulator. Nair expects the fund to be in place within a month.
LIC has been seeking a banking licence for long, but it is mainly hindered by the fact that it has a peculiar organisation structure. Almost all of LIC's assets belong to its policyholders, and it does not have any significant funds by way of share capital. Insurance norms prevent the corporation from investing more than 10 per cent of its capital in a single company.