LIC likely to up stake in Corp Bank

The Life Insurance Corporation of India (LIC) may increase its stake in Corporation Bank and is also open to acquiring organisations in the Indian financial sector, including insurance companies.

Pointing to the need for consolidation of financial institutions in the domestic market if they are to compete in the international arena, LIC chairman S B Mathur said: "In the long-term, smaller banks will not be able to survive unless they are operating on a regional basis. Sooner or later, we will also take larger interest in one or two banks."

LIC as on December 31, 2003, holds a 26.32 per cent stake in the bank and also has significant holding in Oriental Bank of Commerce.

The financial sector is expected to witness many changes like interest rate movements, thereby making consolidation necessary to grow the scale of operations and withstand competition, Mathur said.

He also added that the insurance sector would not be immune to the changes and LIC would equally look at the opportunities in the sector.

Mathur was speaking to the press on the sidelines of a one-day seminar on "Mumbai""global financial power house for India", organised by the Mumbai Education Trust on Saturday.

Commenting on Mumbai's ability to become a powerhouse, Mathur said the physical infrastructure of the city had to be improved to provide better amenities to people and also create capacity for future growth.