SBI, UTI MFs to manage post office insurance funds
Govt appoints UTI MF and SBI MF to manage the corpus of assets lying with postal and rural postal life insurance funds, reports Gaurav Choudhury.india Updated: Dec 13, 2007 21:49 IST
The Goverment on Thursday approved the proposal to appoint state-owned asset management companies UTI MF and SBI MF to manage the corpus of assets lying with postal and rural postal life insurance funds offered by the department of posts.
Both entities have a combined corpus of over Rs 10,000 crore. While postal life insurance has a corpus of Rs 8,934 crore, the assets under management of rural postal life insurance fund was Rs 1,625 crore as on March 2006.
Postal Life Insurance was started in 1884 as a welfare measure for the employees of the posts and telegraphs department. Its ambit has since been expanded and at present it is open for employees of all central and state government departments, nationalised banks, public sector undertakings, financial institutions, local bodies and government-aided educational institutions among others.
Finance Minister P. Chidambaram said that fund managers would adopt “safe and conservative investment policies”. “Much of this money has already been invested, but the MFs will manage the accumulated funds," he added.
An investment board would be constituted to lay down the policy guidelines and investment strategy that will set the frame-work for the day-to-day decisions on investment.
“The decision would help in managing the two postal life insurance funds professionally in line with other life insurance companies,” an official statement said. It would allow subscribers to reap the benefits from a booming stock market as the mutual funds were likely to invest a part of the assets of these two funds in equities.
The decision to appoint fund managers has been modelled on the lines of the National Investment Fund (NIF), which has been created to park funds raised by divesting government equity in public sector undertakings.