Financial Institution Regulator
Financial Institution Regulator
Financial Institution Regulator
The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered
with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the
erstwhile UTI which had in March 2000 more than Rs. 76,000 crores of assets under
management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual
Fund Regulations, and with recent mergers taking place among different private sector funds,
the mutual fund industry has entered its current phase of consolidation and growth.
Key summary:
The unit trust of India (UTI) was established on 1st February 1964 under the ‘’Unit Trust of
India Act, 1963’’ by the government of India.
The Life Insurance Corporation was incorporated and started on 19th January 1956. This was
done by a merger of 16 insurance company and 75 provident societies on that day. The LIC Act
was passed by the Parliament on 18th June 1956, which then came into effect from 1st July 1956.
Life Insurance Corporation has started its journey as a corporate firm from 1st September 1956.
Its all working is governed by the LIC Act. One of the core functions of LIC is an investment. It
is an investment institution. Its main function is to gather money from the people and invest it
into the different securities and financial markets in India and abroad.
As a rule, LIC is required to invest at least 75% of the funds in Central and State Government
securities. Thus, LIC is the largest investment institution in India as on date.
It gathers the funds from the people by issuing insurance policies and invest that funds into
financial markets in India. It also provides term loan and bonds to gather money from the market.
Not only that, the LIC has become the world’s largest insurance company in terms of a number of
policies issued. As of 2019, the total coverage of policies including individual, group and other
social schemes has crossed 13 crores.
Spread Life Insurance widely and in particular to the rural areas and to the socially
and economically backward classes with a view to reaching all insurable persons in
the country and providing them adequate financial cover against death at a reasonable
cost.
Maximize the mobilization of people’s savings by making insurance-linked savings
adequately attractive.
Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as
a whole; the funds to be deployed to the best advantage of the investors as well as the
community as a whole, keeping in view national priorities and obligations of attractive
return.
Conduct business with utmost economy and with the full realization that the money
belongs to the policyholders.
Act as trustees of the insured public in their individual and collective capacities.
Meet the various life insurance needs of the community that would arise in the
changing social and economic environment.
Involve all people working in the Corporation to the best of their capability in
furthering the interests of the insured public by providing efficient service with
courtesy.
Promote amongst all agents and employees of the Corporation a sense of participation,
pride and job satisfaction through discharge of their duties with dedication towards
achievement of Corporate Objective.
Functions of LIC
The main function of LIC is to collect the savings of the people through a life
insurance policy and invest that money in various financial markets.
One of the main functions of LIC is to invest fund into government securities so as
to protect the capital of the people who have given their money to LIC.
LIC has to issue an insurance policy at affordable rates to people.
LIC provides direct loans to industries at lower interest rates. The rate of interest is
as low as 12% for the entire tenure.
It is one of the major stakeholders in many of the blue-chip companies in the
Indian stock market.
It also provides refinancing activities through SFCs in different states and cities.
It also invests in the various corporates via bonds and securities, thus supports
corporate funding in an indirect way.
It also gives loan to the various national projects which are important for economic
growth.
It provides financial supports to socially-oriented projects like electrification,
sewage, and water channelizing, etc
It also gives a housing loan at reasonable rates.
It is the main channel between savings and investment for the people in India.