Here is an essay on ‘Investment Institutions’ especially written for school and college students.
Essay # 1. Unit Trust of India:
Unit Trust of India was established on 1st February, 1964 under the Unit Trust of India Act, 1963. It was established to promote the tendency of savings and investment among the people having small and medium income to promote saving ‘Unit Trust’ started the sale of its units. In the beginning the price of its unit was kept Rs. 10 but later it was arranged to sell these at market rates.
US – 64 was the initial saving scheme of Unit Trust of India. Unit Linked Insurance plan ULIP was started in 1971. It started many other schemes after the success of these two schemes. Among its scheme CGGF, MEP, Capital Gain, Capital Growth, Retirement Benefit Plan, Monthly Income Unit Scheme, Master Share etc. have been very successful.
Unit Trust of India showed much progress till 1988. But around the end of 1998 its main scheme US-64 faced crisis. The maximum part of the capital gained through this scheme had been invested in the capital market. The prices of shares in the capital market crashed so much that it lost about oh third of its investment amount.
A committee was set up urgently. The committee gave us the recommendation for the consolidation of US-64 scheme in coming three years. There was an atmosphere of discouragement among the investors. Then the government assured the investors to fulfill its liabilities. Then it was blamed that the officials of the trust had invested in the companies having doubtful condition.
Then, according to an ordinance issued on 30th, October, 2002, Unit Trust of India has been classified into two groups which got converted into UTI-I and UTI-II. UTI-I includes the government assured return schemes including US- 64, while UTI-II includes Net Asset value based scheme.
UTI-II was named ‘UTI Mutual Fund’ and the management of its assets was done by LIC, SBI, BOB and PNB. Now these four organisations have paid its total value to the government and its ownership and the management of UTI-MF has been obtained by these. These four organisations have a share of 25:25:25:25 in UTI- MF.
Now it is the scheme of the government that UTI-I will be closed after finishing all its liabilities.
Essay # 2. Life Insurance Corporation of India:
Before the foundation of Life Insurance Corporation of India there were 245 native and foreign insurance companies operating in India. First of Oriental Life Insurance Company of India was set up in Kolkata in 1818. Again, Bombay Life Insurance Company in 1923 and Madras Equitable Life Insurance Society were set in Chennai in 1829.
Indian Insurance Company Act was implemented in India for the first time in 1912; again, many amendments were made in it in 1928,1938 and 1950, 154 native, 16 foreign and 75 provident committees were operating in the Life Insurance enterprise in India by 1956.
The central government undertook all 245 indigenous and foreign insurance companies under its control on 19th January, 1956 and nationalised it on 1st September, 1956.
The headquarter of Life Insurance Corporation is in Mumbai. It also has 8 regional offices and 116 divisions’ office. It is operating as a leading organisation in the field of insurance through its more than 2 thousand branches is spread across the country. It also performs the insurance activities in foreign through its foreign offices. Its foreign offices are located in Mauritius, Fiji, Nepal, Sri Lanka, Kenya, Bahrain, Kingdom of Saudi Arabia, Singapore and United Kingdom.
Life Insurance Corporation set up with a capital of Rs. 5 crores by the government of India. India performs its insurance activities through different schemes. Among its various scheme Jivan Anand, Anmol Jivan, Amulya Jivan, Jivan Akshaya, Jivan Shri I, Bima Niwesh, New Bima Gold, Jivan Amrit, Jivan Mitra, Jivan Saral, Jivan-Sathi Plus, Jivan Tarangi, Komal Jivan, Jivan Kishore, Jivan Surabhi etc. are prominent.
Insurance Regulation and Development Authority [IRDA] was set up on 19th April, 2000. According to the standards of this authority LIC has to invest its capital.
Essay # 3. General Insurance Corporation:
The general insurance originated in India in 1950 when Tritan Insurance Company Limited was set up in Kolkata. Many private companies were operating in India before independence but the government took over the control of all insurance companies and under the General Insurance Business (Nationalisation) Act, 1972 it nationalised the insurance sector on 1st January, 1973.
However, the foundation of general Insurance Corporation of India is considered to have taken place on 22nd November, 1972 as on this date the government of India had set up a government company named General Insurance Corporation (GIC) which started working from 1st January, 1973.
107 indigenous and foreign companies operating in India were divided into four groups before nationalization:
These are as follows:
(I) National Insurance Company Limited,
(II) New India Insurance Company Limited,
(III) Oriental Insurance Company Limited, and
(IV) United India Insurance Company Limited.
The headquarters of these companies are at Kolkata, Mumbai, Delhi and Chennai respectively. Originally all these four companies were the subsidiary companies of General Insurance Corporation of India and the latter retained the ownership of all the shares of these companies as a holding company.
But on 3rd November, 2000 it was separated from its subsidiary companies GIC has been enlisted as Indian Insurer. At present all these five organisations are government companies and all these shares are with the government. GIC has now started granting industrial loan also.