The Government has declared that it is up to the Board of Directors of Life Insurance Corporation (LIC) to decide whether they want a banking license or not.

"The LIC board will have to decide that first. Let the board decide, discuss and debate whether LIC should get into the banking business or not," R Gopalan, secretary, department of financial services said.

LIC had joined the race of getting a bank license after the Finance Minister, Mr. Pranab Mukherjee had mentioned in the Union Budget 2010-11 that fresh banking licenses should be issued to private players and non banking financial companies.

The company has a market share of over 60% in the life insurance sector. It also has subsidiaries in the housing finance and mutual fund sector.

This year the insurer is expected to collect a sum as large as Rs. 1, 76,000 crore as premium income. The company settles around 15 million claims annually. It also has to make regular payments for the annuities business.

It is also a very calculative and bulk investor in the capital market. It is not at all a volatile player.

It further holds 10.53% stake in SBI, the largest lender in the country, 10.35 % in the largest private sector lender, ICICI Bank and 7.02% in HDFC Bank.

It has been one of the promoters of Axis Bank and has also tried to take control of it in the past. However, its efforts were not fruitful as Axis Bank was a private sector lender while LIC is a public sector entity.