The government today appointed Rakesh Singh, additional secretary in the department of financial services, as the acting chairman of the Life Insurance Corporation, while demoting incumbent T.S. Vijayan to the post of managing director.
The move follows the cash-for-loans scam, which engulfed LIC’s housing finance arm in November. This is for the first time that any LIC chairman has been asked to work as the managing director.
Vijayan has been LIC’s chairman since 2006. He was eligible for an extension till his superannuation age of 60 in 2013, but the government decided to appoint a bureaucrat as an interim head.
His demotion comes within weeks of the finance ministry setting up a committee under former RBI deputy governor Vepa Kamesam to probe the investments made by the LIC in the last three years.
The committee is expected to make recommendations on the governance standards and investment guidelines of the country’s largest financial institution. The LIC manages assets of about Rs 12 lakh crore.
The CBI had arrested LIC Housing CEO R.R. Nair and several others for allegedly sanctioning loans after taking bribes.
Singh, a 1978 IAS batch officer, will be in charge for three months or till the time a full-time chairman is appointed, sources said.
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