SBI, UTI Mutual Funds to manage post office insurance funds

http://www.livemint.com/2007/12/13162756/SBI-UTI-MFs-to-manage-post-of.html

New Delhi: Government has appointed PSU mutual funds UTI MF and SBI MF as managers of the corpus lying with postal and rural life insurance entities, a move that could lead to investment of the sum into the booming capital market.

The decision to appoint the fund managers for Post Office Life Insurance Fund (POLIF) and Rural Post Office Life Insurance Fund (RPOLIF) was taken by the Union Cabinet at its meeting here.

P Chidambaram, finance minister, said that the PSU fund managers are expected “to follow safe and conservative investment policies” for the money raised largely from rural areas. When asked if the postal money would find its way to the stock market, Chidambaram said it was up to the fund managers to decide.

POLIF has a corpus of Rs8,934 crore, while in case of RPOLIF the sum stands at Rs1,625 crore as on March 2006.

“Much of this money has already been invested, but the MFs will manage the accumulated funds,” he added.

Chidambaram said the scheme has been formulated on the lines of the National Investment Fund -- a disinvestment corpus, which has been entrusted to three PSU managers.