LIC provision on bad loans rise by 46 per cent in FY17

India’s state owned insurance major Life Insurance Corporation of India increased its provisioning on bad loans by 46.2 per cent to Rs 10,760 crore by the end of the fiscal year 2017. The insurance major has been witnessing a continuous surge in its loan books’ stressed accounts.   

LIC had posted a debt portfolio of about Rs 3,70,000 crore in the month of March, 2017, whereas, its total non-performing debt rose by 27.5 per cent to Rs 18,080 crore in the fiscal year 2017.   

Furthermore, the gross non-performing assets of the state owned company rose from 3.76 per cent in 2016 to 4.73 per cent in March 2017. The net non-performing assets also witnessed a rise from 1.84 per cent a year ago to 1.96 per cent in FY17.     

The fresh defaulters adding to the company’s bad loans and doubtful assets category comprised of Rs 1,605 crore loan to Jai Prakash Associates Limited, Rs 1,186 crore loan to Videocon group, Rs 300 crore loan to Jaypee Infratech Limited and Rs 320 crore of advances to GVK group.  

The insurer also received directives from the Insurance Regulatory and Development Authority of India and the finance ministry to review its corporate debt portfolio and consider to cap loans for sub-sectors under infrastructure sector which has been majorly contributing to the increasing rates of defaults.