PSU MFs to handle Postal schemes

NEW DELHI:

In a move that might lead to greater investment in the country’s stock markets, the Union Cabinet on Thursday appointed two public sector mutual funds — UTI Mutual Fund and SBI Mutal Fund — as managers for investment of Post Office Life Insurance Fund (POLIF) and Rural Post Office Life Insurance Fund (RPOLIF).

Briefing newspersons after the Cabinet meeting, Finance Minister P. Chidambaram said that the PSU fund managers were expected “to follow safe and conservative investment policies” for the funds mopped up largely from rural areas.

Asked whether a part of the funds so raised could be directed to the stock market, Mr. Chidambaram said it was up to the fund managers to decide.

While POLIF has a corpus of Rs. 8,934 crore, the money raised through RPOLIF stood at Rs. 1,625 crore as on March 2006. “Much of this money has already been invested, but the MFs will manage the accumulated funds,” he said.

Better returns


Formulated on the lines of the National Investment Fund (NIF) corpus that has been entrusted to three PSU managers, Mr. Chidambaram said the move to permit SBI and UTI MFs as fund managers was following the Department of Post’s decision to invest funds in a manner that would fetch better returns to the investors.

The Cabinet also approved the setting up of an investment board for formulating policy guidelines and an investment strategy for the postal funds.

According to an official statement, a Chief Investment Officer (CIO) with the rank of Additional Secretary is to be appointed along with four Directors for managing and devising day-to-day strategies for these investments.

By Shamsheer (H)