Increasing risk to LIC, NPA reaches document stage

by Jeremy Spirogis
India's cleanest city for 4th consecutive time

New Delhi. The NPA of the state-run insurance coverage firm LIC continues to develop. NPA means stranded loans which might be liable to sinking. As of December 2019, the gross NPA ratio in LIC's debt portfolio elevated to 7.49 per cent from 6.06 per cent as of December 2018. This is the best stage of gross NPA in LIC's debt portfolio. It is price noting that aside from LIC, different insurance coverage corporations comparable to ICICI Prudential Life Insurance and HDFC Life Insurance have a gross NPA of zero. LIC's internet NPA ratio was additionally 0.36 per cent in December 2018 and December 2019.

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LIC Balance Sheet

As of December 2019, LIC has a considerable base with a steadiness sheet of Rs 32.5 lakh crore. Yet this determine of NPA is sort of worrisome. <! –

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                 According to consultants, it will give a deeper evaluate of LIC's funding and subsequent returns. LIC is an insurance coverage firm that invests in long-term devices, the market will carefully monitor these devices. Talking of banks, the gross NPA ratio of SBI and ICICI Bank was 5.95 per cent on the finish of the October-December quarter.

LIC Total Investment

As on 31 December 2019, LIC has invested Rs 32 lakh crore. At the identical time until December 2018, this determine was Rs 29 lakh crore. According to the info, LIC has earmarked Rs 35,466.10 crore as a provision for uncertain loans in its funding property assertion on December 2019 as in opposition to Rs 25,825.73 crore a 12 months in the past. LIC invests in debt and fairness in three of its segments, which embrace life funds, unit linked funds and pension funds.

NPA elevated in final 5 years

LIC's NPA has elevated tremendously within the final 5 years. During this era, LIC's caught loans doubled to Rs 30,000 crore. Many corporations are liable for this. Its NPA ratio was 6.10% within the April-September half of 2019-20. The similar can also be with Yes Bank, Axis and ICICI Bank. At one time the NPAs of personal banks had been very low, however their NPAs elevated because of the difficult business surroundings.

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