Published on Mon, Nov 13, 2006 at 19:08 | Source : Moneycontrol.com
Updated at Mon, Nov 13, 2006 at 19:48
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Govt blue print for FDI insurance hike ready
The finance ministry has finalised a blue print that calls for hiking FDI in insurance to 49%. It proposes to mandate the Indian promoter and public holding to a minimum of 51 per cent while scrapping the need for promoters to cut their holdings to 26% within 10 years of operations, reports CNBC-TV18.
The finance ministry has finalised a blue print that calls for hiking FDI in insurance to 49% and scrapping the need for promoters to cut their holdings to 26% within 10 years of operations, reports CNBC-TV18.
The government will take their blue print to parliament highlighting the changes in Clause 6(AA) of the Insurance Act which hikes foreign holding in an insurance company to 49% from the current 26%.
The government had announced the proposal during last year's budget but had to back off due to strong resistance from left parties. The finance ministry has now proposed a hike in FDI through changes in the Act.
This foreign holding limit will include investments through the FII and FDI route. The ministry also intends to scrap the requirement of promoters divesting their stake to 26 per cent after 10 years of operations. It proposes to mandate Indian promoter and public holding to a minimum of 51 per cent. The extent to which Indian promoters must offload their stake will be left to market forces.
The government will take their blue print to parliament highlighting the changes in Clause 6(AA) of the Insurance Act which hikes foreign holding in an insurance company to 49% from the current 26%.