After the banks now LIC is also in the throes of a massive NPA

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Mumbai, Ta. 22 January 2020, Wednesday

Life Insurance Corporation of India (LIC) is on the verge of a massive NPA when the problem of non-performing assets (NPAs) in the banking sector of the country is still low, according to a report published today. As on September 1, the NIC of LIC stood at Rs.

In the first six months of the current fiscal year, April-September 1, gross NPAs stood at 8.5 percent. The LIC's NPA has more than doubled in the last five years, the report noted.

So far, LICs with an NPA ratio of between 1 and 2 per cent have been similar to private banks with a gross NPA of 5 per cent. In the first six months of the current financial year, the gross NPAs of Yes Bank, Axis and ICICI Bank were 8.8 percent, 8.9 percent and 8.5 percent respectively.

The reasons for LIC's rise in NPAs remain the same as those of banks. Corporate defaults in particular have been more responsive to NPAs. LIC's defaulters include several names, including IL&FS.

The total assets of the state-owned LIC are estimated at Rs 1 lakh crore. LIC finances corporations through term loans and NCDs.

For this NPA, LIC has made provision in the book. Some companies that have exposure to LIC have applied for bankruptcy. It is worth mentioning here that it has come to light many times that LIC money is being used by governments to achieve its objectives.


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