New Delhi: The finance ministry on Wednesday said the board of the state-owned Life Insurance Corporation (LIC) will have to take a call on entering the banking sector.
“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,” financial services secretary R Gopalan said when asked whether the largest insurer is keen to enter the banking space. Gopalan was talking to the media on the sidelines of a Ficci seminar on microfinance here.
Presenting the Budget, finance minister Pranab Mukherjee said RBI could allow more entities, including NBFCs, to set up banks, since then speculation has been rife that LIC’s housing finance subsidiary is eyeing banking licence.
“We need to ensure that the banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographical coverage of banks and improve access to banking services,” the finance minister had said in the budget speech.
With a market share of over 60% in the life insurance space, LIC has subsidiaries operating in housing finance and mutual funds.
According to reports, the Reliance Anil Dhirubhai Ambani Group and many other private sector groups and NBFCs, such as Aditya Birla Group and Malvinder Singh-led Religare Group, have also been eyeing the banking space.