IRDAI asks LIC to trim holdings

Insurance regulator IRDAI has asked the life insurance behemoth LIC to prepare a roadmap to pare its stake to 15 per cent in firms where it breaches this ceiling, but has stopped short of setting a timeframe for the same.

As of end March, LIC owned more than 15 percent in index majors like ITC (16.32 percent) and L&T (16 percent), both part of the Suuti (specified undertaking of the Unit Trust of India) stakes that government owns through LIC, and state— owned Corporation Bank in which it owns 18.91 percent.

“We have advised LIC to reduce its stake in those companies where it owns more than 15 per cent and submit a roadmap for the same as the regulatory norms restrict insurers to own over 15 percent in any firm,” a senior IRDAI official told PTI requesting anonymity.

The official was quick to add that the regulator has not given any time—frame as yet for the same. Also, the official said this “advisory will not be applicable in case of Corporation Bank as LIC has taken a special permission from the government for the same“.

However, this advisory does not apply to LIC’s holding in Corporation Bank as it had already taken a special permission from the Government to increase its stake last year.

LIC also owns around 15 per cent in Axis Bank (14.49 percent, again part of the Suuti holdings), UCO Bank (14.5 percent), and IDBI Bank (13.87 percent) as of end March.

The advisory comes amidst the ongoing PIL in the Bombay High Court against LIC’s stake in the tobacco major by a clutch of individuals including the managing trustee of the Tata Trusts in his individual capacity.