The Hindu : Business : Postal insurance funds likely to be invested in stock market

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Friday, Apr 14, 2006

Business

Business

Postal insurance funds likely to be invested in stock market

Special Correspondent

Department of Posts seeks level-playing field with private players

NEW DELHI: The Department of Posts (DoP) will invest Rs. 10,000 crore from its life insurance schemes in the stock markets for better returns. This follows the Union Finance Ministry allowing the Department to park these funds with special deposits until it identified outside investment opportunities, including investment in stock markets.

Talking to reporters here on Thursday, Union Postal Secretary, U. Srinivasa Raghavan, said the Finance Ministry had made it clear that the Special Deposit Rates on investment in the two insurance schemes of the DoP — Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) — would not be available after September 30 this year.

The Department of Posts had appointed global consultant A. F. Ferguson, for investment options and it had already submitted its report. "We will invest professionally and have enough safeguards to ensure the safety of the policy-holders money,'' Mr. Raghavan said. He said though the Department did not fall under the purview of the Insurance Regulatory and Development Authority (IRDA), its guidelines would be followed strictly. "We will pick up the right type of investment strategy,'' he added.

With the Centre deciding to withdraw the Special Deposit Rates on investments under the insurance schemes and allowing them to compete with private and global insurance companies, the DoP has already sought a level-playing field from the Government. As of now, the PLI is open only for employees of the government and public sector undertakings, and local bodies in urban areas and RPLI is open to all in rural areas.

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