LIC Plans Acquisition Of Up To 10% Equity Stake In NHB-Backed 'RMBS' Entity

Life Insurance Corporation of India (LIC) intends to acquire a potential 10 per cent equity stake in a National Housing Bank (NHB) affiliated company. As per a regulatory filing with stock exchanges, LIC's Board of Directors granted approval for this investment, focusing on residential mortgage-backed securities (RMBS).

RMBS are essentially debt-based assets supported by interest from residential loans, considered a secure investment compared to other asset types. These bonds are secured by a pool of residential mortgages and feature various tranches with differing credit ratings based on factors like risk and seniority. Investors receive interest and principal payments from the mortgage pool regularly.

Additionally, LIC's board sanctioned a revised policy concerning the selection of auditors for the corporation.