Postal Dept may venture into stock market

NEW DELHI: Department of Post may venture into stock market with an initial amount of about Rs 225 crore, a portion of interest earned from the life insurance schemes of post office, with a view to earn better returns for its investors.

"The corpus of Rural Postal Life Insurance Scheme (RPLI) and Postal Life Insurance Scheme approximately stands at Rs 10,000 crore. Next year the interest and premium of this corpus excluding the outgoes is expected to be Rs 1500 crore.

"According to the IRDA norms, 15 per cent of the Rs 1500 can be invested in equities from next financial Year," Department of Post officials said here.

As per the IRDA norms, majority of the interest income will go towards the Government approved securities which will act as a safety cushion for the investors s compared to the vagaries of the stock market.

The returns from the stock market will go towards the Rs 10,000 crore corpus which will give bonus to the policy holders. Telecom Minister Dayanidhi Maran on Wednesday said DoP is working towards this initiative.

Officials said Finance Ministry had given a time-frame of September 30 to DoP to finalise this move but now DoP had sought more time till March 2007 as it is still busy preparing the groundwork for the entry into the stock market.

The Rs 10,000 crore corpus will be frozen to SDR (Special Depository Receipts).