LIC, GE Money, Corp Bank to establish credit card venture

Mumbai, INDIA - 6 September - LIC, India's largest life insurance company, today announced the signing of a Memorandum of Understanding with GE Money India, Corporation Bank, LIC Housing Finance Ltd. and LIC Mutual Fund AMC to create a new credit card company that would leverage the strengths of each company. The parties aim to finalize definitive agreements by end of October.

The proposed venture would leverage LIC and Corporation Bank's strong brand and extensive branch, ATM, and sales distribution network, and GE Money's global and local expertise in credit cards, business management processes, and technology-driven platforms. The JV aims to become a major player in India's fast-growing credit card industry.

Mr. T.S Vijayan, Chairman, LIC said "We are excited to be taking our company to the next phase of growth with this new strategic JV. This partnership brings excellent management skills, credit card experience, and unparalleled distribution networks under one roof and we look forward to working with one another."

Vishal Pandit, CEO of GE Money's India operations, added "The credit card market in India offers significant opportunity for growth. We look forward to leveraging our expertise in consumer financial services to help this partnership become a strong cards player in India."

LIC is celebrating its 51st anniversary this year and aims to strengthen its relationship with its vast customer base by providing various value-added services such as credit cards. Through this JV, LIC aims to offer

premium-payment facility to policyholders with their own credit card. Not only will this provide added convenience and service to LIC customers, it will bring down transaction costs for LIC.

GE Money, a unit of General Electric Company, is a global player in the consumer finance industry and is one of the world's leading card issuers with over 100 million cards in force and operates in over 55 countries. In India, GE Money is part of a strategic Joint Venture in SBI Cards, the number two credit card provider here.

LIC had engaged KPMG to advise it on the entry into the credit card business and the identification of JV partners.

The new company will have its headquarters in the National Capital Region (NCR). LIC has appointed Mr. Hemant Bhargava as CEO for the new venture. A joint team is being put in place, with members from LIC and GE Money to take forward the new initiative.

About LIC: Life Insurance Corporation of India is India's premier life insurance company. Today LIC has assets of more than $163 billion and a life fund of more than $140 billion with a client base exceeding 200 million.

In 51 years, it has become a synonym for life insurance in India and rated the top most service brand in India. It has 2048 branch offices with 1.10 million agents across the country. All of its branches are networked through WAN. LIC has also established a gigantic data warehouse to have a 360 degree view of its customers. The organization has also launched its ambitious EDMS project aiming to digitize all its records across the country in 3 years. LIC is one of the topmost financial institutions of the country. It has presence in Middle East, Mauritius, Fiji, London and Nepal. LIC has successfully launched MICRO INSURANCE product in the last year and is slated to launch Health Insurance product in a matter of a few weeks. LIC is one of the three players chosen by the Pension Fund Regulatory and Development Authority for pension business. For more information please visit www.licindia.in

About GE Money: With more than $190 billion in assets, GE Money, the consumer financial services unit of GE, is a leading provider of credit services to consumers, retailers, and auto dealers in 55 countries around the world. GE Money, based in Stanford, Connecticut (USA), offers a range of financial products, including private label credit cards, personal loans, bank cards, auto loans and leases, mortgages, corporate travel and purchasing cards, debt consolidation and home equity loans, and credit insurance. More information can be found at http://global.gemoney.com.

About Corporation Bank: Corporation Bank is today one of India's leading Public Sector Banks (PSBs), catering to a wide range of customer segments, from individuals to Corporates. With a rich heritage of over a century, it is one of the oldest banking institutions in India. Corporation Bank symbolizes excellence in banking standards, maintaining its premium position with an enviable track record.

Corporation Bank is ranked No.1 Public Sector Bank by Business Today-KPMG survey 2007, based on growth, size and strength. It is the first nationalized bank to bring all its branches under Core Banking Solution, thus enabling its customers to transact from any branch anywhere in the country. It offers a host of tech savvy products, the latest being SMS based payment through mobile phone which is first of its kind in the country. A pioneer Public Sector Bank in Cash Management Services, it moves funds exceeding Rs. 1.25 lac crore annually for its clients.

About LIC Housing Finance: LIC Housing Finance Ltd (LICHFL) is one of the largest providers of housing finance in India having a network of 115 operating offices and 14 Back Offices across the country supported by an agency force of approximately 5500 Direct Sales Agents, Home Loan Agents & Customer Relations Associates. The Company has a representative office at Dubai and opening up shortly at Kuwait. The Company was promoted by Life Insurance Corporation of India (LIC) in 1989. The Company went public in 1994 and launched its maiden GDR offering in 2004. LICHFL enjoys credit rating of 'AAA' from CRISIL for its NCD offerings. The Company has recently launched its Fixed Deposit program, which has been accorded the highest rating of FAAA by CRISIL. The Company has granted loans worth over Rs. 29,000 crores to more than 8,50,000 customers since inception.

For the quarter ended 30th June 2007, LICHFL recorded a Net Profit of Rs. 46.70 cr, a growth of 25% as compared to the previous year. During the quarter, the Company sanctioned loans worth Rs. 1160 crores, at a growth of 16%.The outstanding loan portfolio as on 30th June 2007 stood at over Rs. 18,000 crores, recording a growth of 18%.

About LIC Mutual Fund AMC: LIC of India set up LIC Mutual Fund (The Fund) in June 1989 with a corpus of Rs.2 crore. It was constituted as a Trust in accordance with the provisions of Indian Trust Act, 1882.

LIC Mutual Fund Asset Management Company Limited (The Company) is the investment manager to LIC Mutual Fund. A Board of Trustees called LIC Mutual Fund Trustee Company Private Limited (The Trustees), will monitor The Company's functions, which is answerable to SEBI.

The Company is operating through 17 Area Offices, 51 Business Centres and 62 Investor Service Centres of Karvy Computershare Private Ltd, who are our Registrars and Transfer Agents. It has a network of 471 Chief Agents/Marketing Associates and 13363 intermediaries.

In 2006-07, the Company had launched 16 schemes and collected Rs3109.72 crores during the New Fund Offer (NFO) period. The total fund mobilized from all live schemes in the year was Rs124606.66crores. While the Industry growth was 40.83%, the growth rate of the Fund was 84.41%. It has also bagged 3 ICRA Gold Awards for the best performance of its flagship scheme LICMF Liquid Fund and Best Fund House of Year under Debt Category.

As on August 31, 2007 the total asset under management was Rs12811.27 crores and the Company has set an ambitious target of Rs20,000 crore by 31.3.2008.