Tuesday, 26 February 2019
Toxic IL&FS bond exposure hits 47 lakh Postal Life Insurance holders
The IL&FS bond toxicity contagion is spreading rapidly. The virus has now spread to a rather large body of savers, in this case insured, which coming as it does just before the general election is not good news for the government. With a concerned Trinamool Congress top gun and West Bengal Chief Minister Mamata Banerjee and Communist Party of India-Marxist (CPI-M) leader Brinda Karat both expressing their displeasure over the exposure of 15 lakh salaried employees to these highly toxic bonds in IL&FS, the emergence of Postal Life Insurance (PLI) policy holders being exposed to the same bonds directly will lead to soul searching by the government.
It is imperative for the government to take congnisance of this terminal decline in these bonds and to look at an immediate corrective strategy to arrest the growing panic. What is worrisome is that at the end of 2016-17, 213,323 new policies were added to the PLI policy holders' list with a sum assured of Rs 11,096.67 crore. For the total number of 46.8 lakh policies at the end of the FY 2016-17, the aggregate sum of Rs 1,13,084.31 crore was involved which is humongous by itself. The fund balance at the end of FY 2016-17 was Rs 55,058.61 crore while premium income for that year was Rs 7233.89 crore.