LIC, UTI MF join race for pension business
Life Insurance Corporation and UTI Mutual Fund are in the fray for entering the lucrative pension business, which is slated to grow to Rs 50,000 crore by 2010.
Confirming this, Pension Fund Regulatory and Development Authority member UK Sinha told PTI: "there are many more in the fray."
Life insurers like ICICI Prudential, Birla Sunlife, HDFC Standard Life and Aviva are eyeing the emerging sector, which has the potential to outpace the life insurance industry within a few decades.
PSU banks like Bank of Baroda and Canara Bank are also toying with the idea of tapping long term savings.
The Association of Mutual Funds of India (AMFI) is in talks with the interim pension regulator to allow mutual funds to offer pension schemes, its chairman A P Kurian said.
"Internationally, mutual funds and pension funds worked side-by-side," he said while pitching for entry of major mutual funds in the pension business.
Major fund houses like Principal, DSP Merrill Lynch and Templeton are waiting for the final guidelines for entry into the pension sector.
If PFRDA sets a minimum capital requirement of Rs 100 crore keeping at par with the insurance industry, sources in mutual fund industry said the foreign players have the deep pockets to fulfill that criteria.
US-based Principal, for instance, has tied with Punjab National Bank, Berger Paints and Vijaya Bank for the pension and life insurance foray. Merrill Lynch and Templeton are also leading players in pension business in US and other developed markets.