22 March 2016 Current Affairs GK: Insurance regulator IRDA is satisfied with the investments of LIC in public sector banks. After a scrutiny of its investments in PSU banks, the regulator has given a clean chit to the largest domestic institution with assets of close to Rs 18 lakh crore.According to an official, the regulator did not find anything wrong with its investment pattern in PSU banks. Earlier, the RBI had expressed concern over LIC making huge investments in PSU banks, saying it can “affect the financial stability”.VR Iyer, Member, IRDA, led the team which held discussions with LIC. IRDA along with regulators, including the RBI and the Sebi, is conducting regulatory scrutiny of large institutions which can pose systemic risk in the economy.According to IRDA officials, in a total investment portfolio of around Rs 22,00,000 crore, LIC’s equity investment is just 6-7 per cent and investments in banks are still a smaller portion. LIC has followed the due diligence while making investment in the banks.LIC had made a profit of Rs 24,373 crore from the equity market in 2014-15 as against a profit of Rs 21,257 crore in the financial year 2014, which is a gain of 14.65 per cent. The RBI which has asked banks to clean up their balance sheets by March 2017 has given them a list of some 150 accounts which had either become NPAs or are on the verge of becoming NPAs. Bad loans of PSU banks rose by Rs 94,666 crore during the nine months ended December 2015. Gross NPAs of PSU banks increased from Rs 267,035 crore in March 2015 to Rs 3,61,731 crore in December 2015. This is as much as 7.30 per cent of their total advances. LIC doesn’t believe in the principle of buying today and selling tomorrow. We normally subscribe a bond having a tenure of ten years or more. And all bonds are maturing in time and thus giving or giving us good returns. Also, equity in banks giving us fantastic rate of returns,” the official added. The RBI had red flagged its concerns after the LIC increased its stake in several PSU banks last year. LIC hiked its stake in United Bank from 3.1 per cent to 12.12 per cent, Punjab & Sind Bank from 4.21 per cent to 10.49 per cent, Central Bank from 5.44 per cent to 13.41 per cent, Bank of Maharashtra from 5.31 per cent to 11.24 per cent, Canara Bank from 5.35 per cent to 14.4 per cent and Bank of India from 11.82 per cent to 14.93 per cent during the year ended March 2015. It reduced the stake in some banks recently.