Top 5 Current Affairs related to LIC for LIC AAO 2016 Interview

1. LIC expands globally; to begin Bangladesh operations soon

In line with its international expansion strategy, Life Insurance Corporation of India (LIC) will begin operations in Bangladesh soon. Sources said its joint venture company, Life Insurance Corporation (LIC) of Bangladesh Limited is incorporated in mid-December 2015 and business operations will start shortly.

LIC, through its branches/joint venture companies/wholly-owned subsidiary, is present in 14 countries including places like Singapore, Kenya, Sri Lanka, Nepal and Bahrain among others.

Business growth in the overseas markets has also seen positive results in the past years. First Year Premiums and Total Premium Income from LIC’s global operations, as a whole, was Rs 1479.13 crore and Rs 2403.74 crore in 2014-15, which has been growing at 39 per cent and 30 per cent over the previous five financial years.

With respect to opening up operations in other countries said that they will take a a call on further expansion at an opportune time. As per LIC’s Annual Report for 2014-15, the foreign branches put together issued 11,176 policies with first premium Income of Rs 122.85 crore.

Among the foreign joint venture companies, LIC (International) B.S.C. (c), Bahrain was established in Bahrain as a joint venture company which commenced its operations on 23.07.1989 catering to the life insurance needs of Non-Resident Indians (NRIs) and local population in the Gulf by issuing life insurance policies in US Dollars. The company operates in 5 GCC countries of Bahrain, Kuwait, UAE (Dubai & Abu Dhabi), Qatar and Oman.

Similarly, LIC (Nepal) Ltd., a joint venture company between LIC of India and Vishal Group of Companies with holding of public of Nepal was established in December 2001. It is a listed company whose shares are traded on the Nepal Stock Exchange.

The Corporation directly operates through its branch offices in Mauritius (Port Louis), Fiji (Suva & Lautoka) and United Kingdom (Wembley).

2. IRFC places 30-yr bonds worth Rs 5,000 cr with LIC

Indian Railway Finance Corporation (IRFC), the finance arm of the Indian Railways, has placed a 30-year bond worth `5,000 crore with the Life Insurance Corporation of India (LIC), according to sources aware of the development.

The bonds come with staggered redemptions starting in the 11th year till the 30th year with a coupon reset after 10 and 20 years, according to the sources.

“The bonds will have a coupon rate of 8.02% on a semi-annual basis,” a source said adding that there is a moratorium on the interest payment till five years.

In 2015, the insurer had signed a memorandum of understanding (MoU) with the Indian Railways under which LIC was to invest `1.5 lakh crore in Indian Railways over a period of five years.

In September, FE had reported that IRFC will play the intermediary for raising a large part of the proposed `1.5 lakh crore loan from LIC and the instrument will be a 30-year paper. In October, the Indian Railways had received `2,000 crore from LIC.

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3. SIDBI signs MoU with LIC for Fund-of-Fund operations

In a bid to boost the startup ecosystem in the country, Small Industries Development Bank of India (SIDBI) today signed a Memorandum of Understanding [MoU] with Life Insurance Corporation of India (LIC) for supplementing Government’s efforts under Fund-of-Fund operations for the Venture Fund industry.

The MoU was executed with LIC for contributing to the corpus of MSME focused venture capital funds along with India Aspiration Fund (IAF) being managed by SIDBI, said Kshatrapati Shivaji, CMD, SIDBI, while speaking at the SIDBI startup conclave.

As part of its Fund-of-Fund operations, SIDBI has set up IAF with a corpus of ₹ 2,000 crore pursuant to budget announcement of 2015.

LIC will be contributing up to 10 per cent of the Fund size of IAF to be managed by SIDBI, said LIC CMD K Roy

SIDBI has supported 90 Venture Funds including Social Venture Funds such as Samriddhi Fund (anchored by DFID, UK), Ankur Capital and also Funds focused on healthcare and agribusiness. Some of the Startups benefited out of SIDBI’s direct and indirect initiatives include Billdesk.com, Little Eye Labs, Wildcraft, Smaash Entertainment etc.

In order to bring in more professional outlook, SIDBI constituted a Venture Capital Investment Committee (VCIC) comprising experts such as H K Mittal Head, National Science & Tech. Entrepreneurship Dev. Board, Kiran Karnik former Nasscom Chief, Sanjeev Bikhchandani founder, Naukri.com, Saurabh Srivastava Co-Founder, Nasscom and Indian Angel Network, Prof. R. Vaidyanathan IIM, Bangalore and T V Mohandas Pai, former CFO, Infosys.

4. CCI approves Nomura’s 35% stake sale in LIC Nomura Mutual Fund

The Competition Commission of India (CCI) has approved Japanese financial services major Nomura’s 35 per cent stake sale in the mutual fund business jointly run with the Life Insurance Corporation of India (LIC).

Under the deal, Nomura Asset Management Strategic Investments PTE will sell its stake in LIC Nomura Mutual Fund AMC and LIC Nomura Mutual Fund Trustee Company. These shares will be acquired by GIC Housing Finance (GIC HFL), Corporation Bank and LIC Housing Finance (LIC HFL). The deal has been approved by the Competition Commission of India (CCI), the latest information on the regulator’s website showed.

According to announcements made earlier, LIC HFL will acquire 19.3 per cent stake in both the AMC and Trustee Company while GIC HFL will buy 11.70 per cent in the AMC and 15.70 per cent in the Trustee Company. Corporation Bank will acquire four per cent stake in the AMC.

5. LIC increases stake in IDBI Bank to 14.37%

State-owned lender IDBI Bank on Monday informed stock exchanges that Life Insurance Corp. (LIC) of India now owns 14.37% stake in the bank, after a preferential issue of shares last week.

The life insurance behemoth previously owned 7.21% in the bank, which transferred 7.16% equity stake or 15.87 crore shares to LIC on 23 March.

With this transaction, IDBI Bank is now the second largest bank holding for LIC. As on 31 December, the insurance provider owned 21.22% stake in Corporation Bank, the highest equity it holds in any lender.

Apart from these two, LIC owns 14.36% stake in UCO Bank and 13.75% stake in Canara Bank, at the end of the third quarter.

The government directly owned an 80.16% stake in IDBI Bank as of 31 December.

On 20 February, IDBI Bank’s board had approved the bank’s plan for a preferential issue of capital to LIC, aggregating up to Rs.1,500 crore.

Earlier this month, the state-owned lender had stated that it plans to raise Rs.19,000-20,000 crore worth of equity capital by March 2019, through all available options such as qualified institutional placements (QIPs) and preferential allotment to large strategic investors.

Tomorrow we will share Important Current Affairs Topics for LIC AAO 2016 Interviews.