The Union Cabinet is likely to approve the proposal to allow foreign direct investment (FDI) in Life Insurance Corporation of India (LIC) tomorrow, a move that will facilitate foreign funds to participate in the upcoming IPO of the state-owned insurance behemoth.
The decision is expected at the meeting of the Union Cabinet and the Cabinet Committee on Economic Affairs (CCEA), which is scheduled for tomorrow, according to sources.
It is proposed that a special provision may be incorporated in the Consolidated FDI Policy for FDI in LIC, the sources added. Since the FDI ceiling for public sector banks is 20 percent under the approval route, a similar limit may be kept for FDI in LIC. But the government may consider to keep FDI in LIC under the automatic route so that capital raising process may be expedited, although the final decision will be taken by the cabinet only.