Postal life insurance to be a corporate entity by ’08

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Kolkata, Jun 16: While the government is yet to take a decision on whether the Department of Post (DoP) will have a banking arm under the name of Post Bank of India, the post office life insurance business may become a separate corporate entity next year.

At present, the department is running two life insurance schemes—Postal Life Insurance and Rural Postal life Insurance—with a corpus fund of Rs 9,900 crore and Rs 3,500 crore respectively. The finance ministry keeps the money and in return gives 8% interest on the deposit. A separate directorate of the DoP runs the scheme.

Harpreet Singh, director of postal services, West Bengal circle, said by next year as the postal life insurance would be brought under the Insurance Regulatory & Development Authority (IRDA), a separate entity has to be formed as a rule. Singh said there is a possibility that the government may form a separate corporate entity to run the insurance business of the DoP.

Postal life insurance serves government employees, while the rural postal insurance service serves the rural populace. With insurance schemes coming under the IRDA, the postal department will be in a position to offer various policies.

“First, an investment board will be formed and they will decide on how the fund will be managed and recruitment of professional fund managers. The investment board will decide the nature of the entity which will manage the fund,” said Singh.

On Saturday, officials of the postal department and HDFC Bank, along with minister of state for communication & information technology Shakeel Ahmed, were present here to announce HDFC’s new scheme of offering loans against postal securities.