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Banking may be part of LIC's diversification plan

Life Insurance Corporation of India is evaluating the possibility of venturing into banking operation in light of the emerging environment where many financial institutions, banks and corporates are vying with the idea of stepping into insurance sector.

''We have set up an internal committee to look into various pros and cons before crystallising the decision of going into banking business. We are at an ambiguous state,'' LIC chairman G Krishamurthy told newspersons in Bombay today, on the occasion of Insurance Week that began yesterday.

On other diversification measures, he said that the corporation would be earmarking about Rs 50 billion annualy from its accretion funds towards investment in infrastructure and rural development projects. In the next five years, LIC would invest nearly Rs 300 billion in infrastructure projects such as power, roads, ports and airports and these funds would be channalised either directly or through development institutions like IDBI, ICICI and infrastructure development funds.

A part of such funds (around Rs 15 billion) may also go in for investment in capital market, he said.

On appointment of fund managers abroad, he said that the corporation was in the process of discussion with Merryl Lynch for its UK operation.

UNI