The Government has said that it is left to the Board of Directors of Life Insurance Corporation (LIC) to determine if they want to go for a banking license or not.
R Gopalan, secretary, department of financial services said, “The LIC board will have to decide that first. Let the board decide, discuss and debate whether LIC should get into the banking business or not”.
LIC had expressed interest in obtaining a bank license after the Finance Minister, Mr. Pranab Mukherjee had said in the Union Budget 2010-11 that new banking licenses should be given to private operators and non banking financial companies.
LIC holds a market share of more than 60% in the life insurance sector and also has associates in the housing finance, offering Home Loans and mutual fund business.
It also has a stake of 10.53% in SBI, 10.35 % in ICICI Bank and 7.02% in HDFC Bank. It is also one of the promoters of Axis Bank and has attempted to take its control earlier. But these attempts proved futile. This was because Axis Bank was a private sector company while LIC is a public sector company.
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