LIC Housing Fin Q1 net up 19%

LIC Housing Finance reported a 19 per cent rise in net profit at Rs 382 crore for the first quarter ended June 30, 2015 on the back of healthy retail, mortgage loan growth and lower bad loans.

The non-banking financial company’s net profit a year ago was at Rs 322 crore.

Net interest income increased to Rs 659 crore, up 30 per cent as against Rs 506 crore.

The outstanding loan portfolio grew by 18 per cent to Rs 1.10 lakh crore from Rs 93,609 crore a year ago.

Sunita Sharma, MD & CEO, LIC Housing Finance, said, “We have seen growth across the country in the individual – mortgage and retail home loan segment...”

Mortgage portfolio grew over 100 per cent to a base of about Rs 7,000 crore from Rs 4,000 crore a year ago. The NBFC plans to focus on this segment to increase the portfolio to about 7-8 per cent by year-end from the current 4.8 per cent of its total book.

The individual loan portfolio stood at Rs 1.07 lakh crore as against Rs 91,058 crore, a growth of 18 per cent. On the other hand, developer loan portfolio stood at Rs 2,708 crore as on June 30, 2015, a 6 per cent increase as against Rs 2,551 crore as on June 30, 2014.

During the quarter, the company disbursed loans of Rs 6,124 crore in Q1FY16 as against Rs 5,560 crore for Q1FY15.

Further, Sharma said that the company’s focus was on recovery and reducing bad assets.

As on June end 2015, total gross NPAs (non-performing assets) on developer loans was Rs 659 crore or 0.60 per cent as on June 30, 2015 down from Rs 753 crore or 0.80% as on June 30, 2014. Gross NPA ratio in individual segment also declined to 0.36 per cent from 0.40 per cent.

Net NPAs also reduced to 0.33 per cent from 0.49 per cent a year ago.

With a growth outlook of 20 per cent in the year ahead, Sharma also plans to increase focus on technology with more e-commerce tie-ups, social media and mobile application


Source : Thehindubusinessline

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LIC’s higher stakes in banks a concern: Mundra

Country’s largest financial institution Life Insurance Corporation’s (LIC) higher stakes in a clutch of state—run and private banks could potentially create a contagion effect on the system, Reserve Bank deputy governor S S Mundra said today.

“LIC’s stake is more than 9 per cent for the banking system as a whole. So, from the point of inter-connectedness and contagion, as a probability, it is something that affects financial stability. It’s not that it’s affecting today or it’s going to affect tomorrow, but these are probabilities,” he said when asked about why he is worried about LIC raising holding in banks.

But Mundra, talking to reporters on the sidelines of an event organised by the National Payments Corporation of India (NPCI), was quick to add that he did not name any entity in his previous media interaction this week wherein also he had warned about such risks.

When asked what the central bank is doing on this, he said, “There are inter—regulatory frameworks. And what we do in our financial stability report, we flag these issues.”

According to Mundra, with 9.21 per cent stake in banks, including private lenders, LIC is the largest shareholder in the banking sector after the government.

Some of the large holding that LIC has include a whopping 22.5 per cent in Corporation Bank, 21.4 per cent in Allahabad Bank, 13.9 per cent in the nation’s largest lender SBI, 16 per cent in IDBI Bank, 12.7 per cent in Punjab National Bank and 11.33 per cent in Syndicate Bank.

It also holds 13.6 per cent in the private sector lender Axis Bank, in which the government also holds almost same stake and 9.7 per cent in ICICI Bank apart from some stakes in banks like HDFC, Kotak Bank and Yes Bank among others.

Source : Thehindubusinessline

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LIC Jeevan Sangam plan to be available up to June 1

The close-ended Jeevan Sangam (Plan 831) introduced by the Life Insurance Corporation will be available in the market for subscription up to June 1.

Jeevan Sangam is a participating, non-linked, savings-cum-protection, single-premium plan that provides for a high-level risk cover.

The proposer has an option to choose the maturity sum assured, said Shaji M Shankar, Senior Divisional Manager, LIC, Thiruvananthapuram.

The single premium payable (exclusive of service tax) will depend on the chosen amount of maturity sum assured and age of the life assured.

Priority of an assured varies with the stage of life of the individual. Some are concerned with building a corpus for pension on retirement, while some others may like to fund children’s education and marriage.

The plan provides for a death benefit ten times of the tabular single premium along with loyalty addition. Maturity sum assured shall be payable along with loyalty addition.

Loyalty addition

Loyalty addition refers to participation in surplus (profit) and the policy is eligible for this after the completion of five policy years.

The minimum and maximum years for entry are six and 50 respectively and the minimum basic sum assured is Rs.75,000. There is no limit to the maximum sum assured. The policy term is for 12 years and premium payable, single.

Tax benefits include guaranteed exemption under Section 80C and tax-free Maturity under Sec 10 (10) D.

For a maturity sum assured of Rs.4 lakh, a single premium of Rs.1,80,540 paid at age eight will add up to insurance cover of Rs.18,85,400 (loyalty additions extra kicking in after five years).

Amount of premium eligible for rebate is Rs.1.5 lakh. A single premium of Rs.1,81,080 paid at age 10 will provide for an insurance cover of Rs.18,90,800 with applicable loyalty additions and eligible rebate.

Similarly, a single premium of Rs.1,82,220 paid at age of 12 will return an insurance cover of Rs.19,02,200; and Rs.1,84,100 paid at age 15 will make available Rs.19,21,000.


Source : Thehindubusinessline

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LIC's FY15 policy sales income hits a 10-year low

Life Insurance Corporation of India posted its worst performance in a decade on income from policy sales in 2014-15, as new regulations threw out many of its products.The coming year could be equally tough with well-capitalised private rivals taking on the state-run behemoth.

LIC's premium collection from sale of new policies fell 13.62% to Rs 78,302 crore in the fiscal year ended on March 31, 2105, compared with Rs 90,644 crore the previous year.

"Last year (2013-14) was an extraordinary year," said an LIC executive who didn't wish to be named.

"Many blockbuster products were withdrawn and new products were introduced this year (2014-15). This has affected sales."

Overall, the life insurance industry reported a 5.84% fall in new business income collection Rs 1.13 lakh crore, mainly because of LIC's weak performance. Private-sector companies posted an 18% increase in new business income, aided mainly by sale of unit-linked insurance plans.

Private-sector insurers capitalised on a surge in investor in terest in stocks by launching unit-linked plans and marketing them well.

LIC, the country's largest insurer, didn't have a unit-linked product, which was the flavour of the season. Unit-linked insurance plans are instruments where a part of the premium goes for insurance cover and the rest is invested in a fund. As much as 100% of the fund can be invested in equities.

LIC has predominantly relied on its traditional products. All insurance products have been re-launched this year in accordance with new rules, which offer policyholders guaranteed surrender value and lower commission charges.Traditional policies are debtoriented products in which the bulk of the underlying investment is in government and corporate bonds, with a maximum of 15% deployed in equities.

Agents push sales in the last quarter of the fiscal year as investments in life-insurance schemes with sum assured of at least 10 times the annual premium are eligible for tax deduction within the Rs 1 lakh limit under I-T rules.

Source : Economic Times

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Canara Bank to get Rs 1,500 crore fund infusion from LIC soon

State-owned Canara Bank is likely to get fund infusion of up to Rs 1,500 crore from the country's largest insurance firm Life Insurance Corporation of India (LIC) next month.

"The fund would be raised by issuing 4 crore shares through preferential allotment and the capital raised would be utilised for business growth," a senior Canara Bank official said.

At the current market price, Canara Bank would be able to raise about Rs 1,500 crore by issuing shares on preferential basis.

The bank has fixed March 31 as the relevant date for purpose of determination of pricing of shares at which shares would be issued to the insurer, the official said.

As of December 2014, LIC held 6.4 per cent stake, or 2.95 crore shares, in the bank.

The bank already has got in-principle approval from LIC for subscription of up to 4 crore shares.

As per the approval letter from LIC, the official said, total exposure cannot exceed 15 per cent of post issue capital of the bank at any point of time.

The board of Canara Bank has already given approval for issuance of preference shares. The bank would seek shareholders' nod for the same on April 30.

After approval from the Extraordinary General Meeting, preferential issue in favour of LIC would be done, the official added.

For the third quarter ended December 2014, Canara Bank reported 60.2 per cent increase in net profit at Rs 655.92 crore despite increase in bad loans.

The Bangalore-based lender had posted a net profit of Rs 409.35 crore for the October-December quarter of 2013-14 fiscal.

The bank's total income increased to Rs 12,227.86 crore for the quarter under review from Rs 10,935.29 crore in the year-ago period.

As far as asset quality of the bank is concerned, gross NPAs as a percentage of total advances rose to 3.35 per cent from 2.79 per cent in the same quarter a year ago.

Its net NPAs went up to 2.42 per cent from 2.39 per cent at the end of December 2013.

Gross NPAs in absolute terms rose to Rs 10,573.57 crore as compared to Rs 8,073.92 crore at the end of December 2013.

Source : Economic Times

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LIC to invest Rs. 1.5 lakh cr in Railways over next 5 years

Railways and Life Insurance Corporation (LIC) have signed a memorandum of understanding (MOU) to aid the financing of Railway Projects in the country.

Under the MoU, the LIC will make available to the Ministry of Railways/its entities a financial assistance of upto Rs. 1,50,000 crore over the next five years for implementing Railway projects.

Under this financing facility, there would be a five year moratorium on interest and loan repayment and the rate would be linked to 10-year benchmark (G-Sec yield) plus 10 basis points.

The financial assistance will be available from the financial year 2015-16, according to the MoU.

This historic MoU was signed by Rajalakshmi Ravikumar, Financial Commissioner, Ministry of Railways and S.K.Roy, Chairman, LIC here on Wednesday in the presence of Finance Minister Arun Jaitley and Railways Minister Suresh Prabhu.

This MoU would help Railways fund part of the total Plan budget of Rs. 10,011 crore for the financial year 2015-16.


Source : Thehindubusinessline

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LIC unveils two new plans

Life Insurance Corporation (LIC) launched two new plans- Jeevan Sangam a savings cum protection single premium plan and a new children’s money back plan.

LIC’s Jeevan Sangam is a participating, non-linked, savings cum protection single premium plan wherein the risk cover is a multiple of single premium. The proposer will have an option to choose the Maturity Sum Assured. The single premium payable (exclusive of service tax) will depend on the chosen amount of Maturity Sum Assured and age of the life assured. The plan will be open for sale for a maximum period of 90 days from the date of launch.

LIC's New Children’s Money Back Plan is a participating non-linked money back plan. This plan is specially designed to meet the educational, marriage and other needs of growing children through Survival Benefits. In addition, it provides for risk cover on the life of child during the policy term and also for Periodic payments on surviving to the end of specified durations.


Source : Thehindubusinessline

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IRDAI slaps Rs. 10 lakh penalty on LIC of India

The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of Rs. 10 lakh on Life Insurance Corporation (LIC) of India.

In an order, the authority said the filled in proposal forms were altered by LIC without necessary authentication from the proposers. The policies were also split and more than one policy was issued under a single proposal.

``Tampering with the proposal forms without the consent of the policyholders may affect the policyholders’ interest adversely,’’ it said.

Similarly, LIC had also violated existing norms on investments in other entities in certain cases. A fine of Rs. 5 lakh each was imposed for both these violations. The corporation was also warned to follow regulations in many other areas of business, according to the circular.


Source : Thehindubusinessline

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UCO Bank to raise about Rs. 400 cr by selling shares to LIC

State-owned UCO Bank today said it will sell 6.08 crore share to LIC on preferential basis which may fetch about Rs. 400 crore to the bank.

The board of the bank at its meeting has approved a proposal for issue of 6.08 crore shares of Rs. 10 each to Life Insurance Corporation of India (LIC) on preferential basis at a price to be determined in accordance with SEBI regulation, UCO Bank said in a statement.

LIC currently holds 8.69 per cent stake in UCO Bank.

Following the fresh investment, stake of LIC would further go up by more than 5 per cent.

At the current market price, the bank would raise about Rs. 416 crore by allotting shares on preferential basis to LIC.

Shares of the bank closed at Rs. 68.35 per unit, down 5.66 per cent on the BSE.


Source : Thehindubusinessline

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Jan Dhan life cover: Banks, LIC told to make claim forms available on website

The Finance Ministry has asked banks and Life Insurance Corporation to make available claim forms on their websites for the Rs. 30,000 life cover promised under the Pradhan Mantri Jan Dhan Yojana (PMJDY).

LIC has been asked to settle the claim within 15 days of the receipt of the claim form.

This was conveyed to the banks at a video conference meeting held by Joint Secretary Anurag Jain with executive directors of public and private sector banks to review the progress of PMJDY.

Till December 22, banks have opened 9.83 crore bank accounts under the PMJDY and issued 7.28 crore RuPay cards.

At this meeting, banks were asked to issue passbooks to all accountholders and activate RuPay cards.

Banks have agreed to complete this task by January 15 next year.

srivats.kr@thehindu.co.in


Source : Thehindubusinessline

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LIC agents to stage dharna in Mumbai on Wed

The LIC Agents’ Organisation of India will hold a massive dharna at Azad Maidan in Mumbai on Wednesday to present a charter of demands to the LIC management.

Agents have not agitated for a raise in their commission since 1956, PG Dileep, General-Secretary of the organisation, told BusinessLine.

RETAIN COMMISSION

This is despite the price of essential commodities and petroleum products having shot up many times over during this period.

“Even now we are not asking for a raise in the commission rate. Our main demand is that the existing commission on policies should not be reduced.”

Dileep said the very existence of agents was now under threat due to a decision to eliminate the agency system.

If an agent were to lose his job, the Government would not be able to provide him alternate employment because of the sheer numbers involved — 12 lakh.

‘Save LIC and protect agents’ is the slogan of the Association, Dileep said.

GLOBAL MODEL

LIC's service model, represented by its agency force, was a globally acclaimed model.

But various regulations imposed by LIC over the last two decades have been directed at eliminating this very force.

About 17 lakh have been terminated during the last five years. Though recruitment has been attempted through various channels, the total number achieved last year was only 91,052.

If the LIC has successfully withstood competition from the private sector during the last 14 years, credit should go to the cooperation and hard work of the agents, Dileep said.

Multinationals and Indian corporates have realised that they can defeat LIC and eat into its business by destroying the agency force.

PREMIER COMPANY

LIC record of claims settlement over the past 11 years was the best globally. While other private companies settled 48-80 per cent of the claims every year, LIC has settled 99 per cent.

It has been investing its funds in Government securities and bonds and extending long-term loans to public sector undertakings at low interest. After the entry of private insurance companies, a part of the funds was being invested in the share market.

An amount of Rs. 70,000 crore was lying with the Government without interest as sovereign guarantee.

The service tax on policies was also borne by the LIC. All these have resulted in low returns, affecting the bonus payout to policy-holders.

POLICIES CLOSED

LIC was forced to purchase shares of companies and banks which were not performing well. It has dispensed with its conventional and other attractive policies with effect from January 1, 2014.

There was only one live policy till January 6. Now it has only nine policies against 56 policies during the same time last year.

Up to 80 per cent of the business was done during January-March. It was at this time that LIC has stopped a number of attractive policies.

About 38 crore people have been covered by these attractive policies and there was no justification in closing them.

Naturally, it would reflect negatively on the quantum of business done. Still, LIC commands 84.4 per cent of the insurance business. But it will need to face the threat of downfall from now on, Dileep said.


Source : Thehindubusinessline

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LIC waiting for disinvestment plan; ready to invest more in equities

Life Insurance Corporation, the country's largest life insurer is expecting to meet 20 per cent of its annual budgeted new business premium collection of Rs. 35,000 crore in the third quarter of the current fiscal, said a top company official.

SK Roy, Chairman of LIC, said on the sidelines of the FICCI insurance summit that while the new business premium collection for the state-owned insurer has seen a very good growth in November, the company may not be able to surpass its previous year's record premium collection in the third quarter.

Roy said that at present the insurer has already invested Rs. 45,000 crore in equity markets in the current fiscal and is ready to buy more if the government comes out with its divestment programme.


Source : Thehindubusinessline

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Hamstrung by the limited number of products: LIC chairman

Life insurance Corporation, the country’s largest insurer, is facing a challenge due to the limited number of products in its basket after the new regulatory guidelines came into force in January 2014, said a top company official.

The Insurance Regulatory and Development Authority put in place a new set of guidelines for life insurance products which involved changes in product structure, and required insurers to phase out all old products and re-file all their existing products.

LIC Chairman SK Roy said that, at present, the company has only 22 products in the market as compared with 60-odd products earlier. He was speaking at the Asia Insurance Post seminar in Mumbai.

“For an organisation of our size with an agency force of 1.2 million, 27,000 unit managers and a huge marketing team, there is a very large appetite for products, and we are struggling to meet the demand. We cannot escape the reality that products are a major challenge for the life insurance industry,” said Roy.

On being asked about the insurer’s investment during the first half of the current fiscal, Roy said the company has Rs20,000 crore in equity investments in the period.

“We have had a very long bull run so this has been an opportunity for us to book some profit. We are long-term investors, so we have to do a balancing act so that we don’t liquidate all our assets and yet book profits to pass on to the policy-holders. So we do a tightrope walk on that,” said Roy.
Investment plans

Asked about the insurer’s plans to invest in public sector companies in line with the Government’s divestment plans, Roy said, “Contrary to what is believed, we have done well on this front, so if an opportunity comes, we will look at it. Right now there is no opportunity.”

Roy said the insurer’s design team was working on a product on the unit-linked platform, where it is currently not present, and the insurer would launch a Ulip product by the year end.


Source : The Hindu

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LIC Housing to cut funding cost

LIC Housing Finance Ltd is keen on reducing its funding cost by going in for NCDs (non-convertible debentures) rather than bank borrowings. “Last year, we brought down our bank borrowings from 29 per cent to 25 per cent, which is expected to improve our net interest margin from the present 2.18 per cent to 2.25 per cent next year,” said Sunita Sharma, Managing Director and CEO, LIC Housing Finance Ltd. She was here to inaugurate the 17th edition of annual property expo. Attributing the growth to increasing demand from the retail segment, she said the company would focus on Loan Against Property ( LAP) generating more business.

Source : The Hindu

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LIC launches new Jeevan Anand plan

LIC has re-launched its “Jeevan Anand” plan, a participating non-linked plan which offers an attractive combination of protection and savings.

This product provides financial protection against death throughout the lifetime of the policyholder with a special feature wherein it offers cover for whole life even after payment of maturity amount.

The policy can be taken from age 18 years to 50 years with age of policyholder on policy maturity age not exceeding 75 years. The policyholder can choose policy term from minimum 15 years to maximum of 35 years. The minimum sum assured is Rs 1 lakh and in multiples of Rs 5,000.

The policy matures at the end of the chosen policy term and the surviving policyholder will get Basic Sum Assured along with Vested Simple Reversionary Bonus and Final Additional Bonus.

The sum assured on death during the term of the policy will be higher of 125 per cent of Basic Sum Assured or 10 times of annualised premium.


Source: Thehindubusinessline

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LIC Housing looking to raise $300 m from overseas market

LIC Housing Finance Company is awaiting the Reserve Bank of India’s nod to raise $300 million from overseas markets for lending to customers wanting to buy affordable houses.

Sunita Sharma, Managing Director and CEO, LIC Housing Finance, said: “We applied to the RBI about two months back.”

The housing finance arm of the state-run insurance major, Life Insurance Corporation of India, said it will raise the money through external commercial borrowing (ECB).

Money borrowed from overseas is usually cheaper as the interest rates in countries such as the US are much lower than interest rates in India.

The proceeds from the borrowing will be used by the company to lend to buyers under the affordable housing segment. This means that the buyers of affordable houses will get loans at a cheaper rate.

If the company gets RBI nod, it will have to ensure that the money raised through the ECB is given to individuals buying houses where the cost of each unit is Rs 30 lakh or less. The loan amount in such cases cannot exceed Rs 25 lakh, according to the

RBI norms

Further, the RBI defines affordable houses as having a maximum carpet area of 645 square feet (60 square metres).

In June, the RBI said that housing finance companies (HFCs) together can borrow a maximum of $1 billion every year under the scheme till FY 2014-15.

Only those HFCs that have had net-owned funds of Rs 300 crore for the past three years are eligible to borrow under this scheme.

In Budget 2012-13, the Government had announced that HFCs and builders/developers will be allowed to raise money under the ECB scheme. Certain slum-rehabilitation projects are also eligible to get funds under the scheme.

Source: thehindubusinessline

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LIC Housing Finance will meet bank licence norms: Sunita Sharma, MD & CEO

LIC Housing Finance's first woman MD & CEO, Sunita Sharma, is confident of the company meeting all of Reserve Bank of India's criteria for a bank licence. According to Sharma, the company is prepared to transfer various businesses under a holding company as required by RBI.

If successful in its bid, LICHF will convert into a bank and come under a holding company which will also own LICHFL Care Homes and LIC Financial Services — a distribution company. Both of these are at present subsidiaries of LICHF.

"LICHF is a separate private company and the application for a bank licence does not involve the Life Insurance Corporation of India," said Sharma . "We do not have any problems in meeting any of the eligibility criteria as we are a highly compliant company."

RBI's screening committee is expected to meet again this month and hand over the list of qualifying candidates to an external committee headed by Bimal Jalan, a former RBI governor . Jalan had said that the committee would be able to come out with its recommendations in three months. Earlier this month, the Tata group withdrew from the race for a bank licence after they found the process of restructuring operations too complex.

Sharma, who took charge last month, was earlier executive director in charge of equity research at LIC. She was appointed CEO of the housing finance company following her predecessor V K Sharma's elevation as MD of LIC.


Source: Economic Times

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LIC to stop selling 34 policies in December

Insurance giant Life Insurance Corporation has decided to stop selling as many as 34 policies, including Jeevan Anand, Jeevan Madhur and Jeevan Saral, to comply with new regulatory guidelines.

These policies are withdrawn in December as they are not in conformity with the provisions of new regulations on non-linked insurance products, linked insurance products and health insurance products, a senior LIC official said.

Of the 34 products, LIC will stop sale of Jeevan Amrit from December 7, Jeevan Surabhi from December 14 while two other schemes from December 21 and December 28 respectively.

Remaining 28 policies will go off LIC’s shelves from December 31.

Last month, LIC had withdrawn 14 policies including Convertible Term Assurance, Children Deferred Endowment Assurance.

These policies are being discontinued as part of regulatory compliance.

The Insurance Regulatory and Development Authority (IRDA) had extended the deadline for implementation of new individual product regulations for the life insurance industry by three months to December 31.

The new guidelines are aimed at making insurance policies more customer-friendly.

“All the existing group policies and all the existing individual products not in conformity with the provisions of this regulation shall be withdrawn from August 1, 2013, and January 1, 2014, respectively,” IRDA had said in a circular.

With regard to group policies, life insurers have been asked not to enrol these policies after the immediate policy anniversary falling due after July 2013.

However, it had said all group policies at the time of renewal of such policy shall be given an option to switch over to the modified version of the group product, if any, once introduced.

LIC has outperformed its peers in the private sector by recording a 7 per cent growth in premium collection during the first half of the current fiscal.

The company witnessed a 7.26 per cent growth in premium income to Rs 37,906 crore during the six-month period ending September.

Source: thehindubusinessline

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LIC to discontinue 14 policies

Country’s insurance giant Life Insurance Corporation (LIC) has decided to stop selling as many as 14 policies, including Jeevan Mitra and Anmol Jeevan.

Of this 14 products, LIC has already withdrawn seven policies, including Convertible Term Assurance, Children Deferred Endowment Assurance, with effect from November 16.

As many as five policies including Jeevan Mitra, Jeevan Paramukh Plan, LIC’s Bima Account I and II will go off LIC’s shelves from November 23.

Besides, two policies New Jeevan Nidhi and Anmol Jeevan I will be discontinued from November 30.

Many of these policies are being discontinued as part of regulatory compliance, a senior official of LIC said.

The Insurance Regulatory and Development Authority (IRDA) had extended the deadline for implementation of new individual product regulations for the life insurance industry by three months to December 31.

The new guidelines are aimed at making insurance policies more customer-friendly.

“All the existing group policies and all the existing individual products not in conformity with the provisions of this regulation shall be withdrawn from August 1, 2013 and January 1, 2014, respectively,” IRDA had said in a circular.

With regard to group policies, the life insurers have been asked not to enroll these policies after the immediate policy anniversary falling due after July 2013.

However, it had said, all group policies at the time of renewal of such policy shall be given an option to switch over to the modified version of the group product, if any, once introduced.

LIC has outperformed its peers in the private sector by recording a 7 per cent growth in premium collection during the first half of the current fiscal.

The company witnessed a 7.26 per cent growth in premium income to Rs 37,906 crore during the six-month period ending September.

As per the company’s website, LIC has so far withdrawn 19 other policies, including Jeevan Astha, Market Plus I and Jeevan Nischay and Jeevan Varsha.

Source: thehindubusinessline

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IOB to raise Rs 1,626 cr via preferential shares

The board of directors of Indian Overseas Bank has cleared the bank’s proposal to raise Rs 1,626 crore from the Government and Life Insurance Corporation through preferential allotment of equity shares, the Bank said in a regulatory filing.

IOB will issue equity shares of face value of Rs 10 with premium on preferential basis to the Government and LIC up to an amount of Rs 1,626 crore. It decided to issue perpetual bonds to the extent of Rs 2,497 crore and to authorise its Chairman and Managing Director to fix the size of the issue and finalise the terms and conditions, including fixation of coupon rate depending upon the market conditions.

The chairman may further be authorised to take actions in connection with issue of perpetual bonds, either domestically or overseas, according to the announcement.

The board meeting was held in the wake of the Government’s decision to infuse capital to the extent of Rs 1,200 crore to IOB.

The Government will be allotted shares to the tune of Rs 1,200 crore while LIC will be getting shares to the extent of Rs 426 crore. The government’s stake in IOB currently stands at 78.2 per cent.

IOB recently said it would require up to Rs 2,100 crore capital for the current financial year, and it was planning to raise around Rs 900 crore through QIP or private placement.

ravikumar.r@thehindu.co.in

Source: thehindubusinessline

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