Insurance and Regulatory Development Authority has slapped Rs 200,000 penalty on Reliance General Insurance Company for failing to meet rural sector business target for 2001-02.

"The company showed zero performance for the rural segment but their work in social sector segment is resounding", IRDA chairman N Rangachary told reporters on the sidelines of a function organised by Bombay Stock Exchange in Mumbai on Saturday.

Reliance General Insurance has issued about 5.4 million policies in social sector in Gujarat, Rangachary added.

Earlier in his address, IRDA chief said the regulator has prescribed certain norms for meeting business targets in designated areas including rural and social sector.

The large part of market lies outside urban areas. In fact, the rural market, and socially and economically weak require insurance cover more than those most of the urban people, Rangachary said.

The gross premium collection by the 12 general insurance players as on March 31, 2003 rose to Rs 13,500 crore (Rs 135 billion) from Rs 11,600 crore (Rs 116 billion) in 2001-02, he said adding public sector players had 90 per cent share while the rest was with private players.