The Indian government has made a major announcement regarding the future of the LIC of India (Life Insurance Corporation). The post of Chairman at LIC will be abolished from end-June 2024, and the insurance company will instead be led by a Managing Director and CEO. This decision was announced in a notification on Friday, and Siddhartha Mohanty has been appointed as the Interim Chairman of LIC until June 29, 2024. Mohanty will then take over as the MD & CEO until June 7, 2025, when he turns 62 years old. This means that Mohanty will be the first MD & CEO of LIC.
Amendments to the LIC Act and the Future of LIC of India
The decision to abolish the Chairman post at LIC is part of a larger set of changes that were made to the Life Insurance Corporation of India (Employees) Pension (Amendment) Rules and the LIC Act in 2021. These changes pave the way for the appointment of a Managing Director and CEO, and the removal of the Chairman post. The notification issued by the Department of Personnel and Training stated that Mohanty has been appointed as the Chairman of LIC for a period with effect from the date of assumption of charge of the office until June 29, 2024. After that, he will take over as the CEO and Managing Director until June 7, 2025. This will be in a pay scale of Rs. 2,25,000 (fixed).
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The Career of Siddhartha Mohanty at LIC of India
Siddhartha Mohanty has been with LIC since 1985, when he joined as an apprentice officer. He has nearly four decades of experience in the financial services industry, and has worked in various roles across the organization. Before becoming the MD of LIC in February 2021, Mohanty was the CEO of LIC Housing Finance. He has also worked in marketing, HR, investments, and legal departments at LIC. Mohanty is a veteran in the financial services industry, and his appointment as the first MD & CEO of LIC is a significant milestone for the organization.
Modi Government’s Decision to Split Chairman’s Post
The decision to split the Chairman’s post at public sector banks into non-executive Chairman and Managing Director and CEO was taken by the Narendra Modi government in 2014. State Bank of India is the only exception, as it is still headed by a Chairman. Like SBI, LIC also has four Managing Directors. The decision to abolish the Chairman post at LIC is part of this larger trend of splitting the Chairman’s post into two separate roles.
Conclusion
In conclusion, the decision to abolish the Chairman post at LIC of India is a significant milestone in the history of the organization. Siddhartha Mohanty’s appointment as the first MD & CEO of LIC is also a significant development. This decision is part of a larger trend of splitting the Chairman’s post into non-executive Chairman and Managing Director and CEO, which was initiated by the Modi government in 2014. The future of LIC of India looks bright, and it will be interesting to see how the organization adapts to this new leadership structure.
