The government on Wednesday said the Life Insurance Corporation?s board will have to decide on applying for a banking licence.
?The LIC board will have to decide that first. Let the board decide, discuss and debate whether LIC should get into the banking business or not,? R Gopalan, secretary, department of financial services, ministry of finance, said on the sidelines of a Ficci seminar on microfinance.
With a market share of over 60% in the sector, LIC has subsidiaries operating in housing finance and mutual funds. FM Pranab Mukherjee said RBI will issue fresh banking licences to private companies and non banking finance companies. RBI will frame guidelines for applying companies willing to apply for a banking licence. Separately, Gopalan said the country?s largest lender, State Bank of India, has not sought the government?s approval for a rights issue or a follow-on share issue.