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Govt to do away with clause mandating it to hold majority stake in insurance companies: Report

The move would allow foreign companies to hold upto 74 percent stake in the divested general insurance company.

July 26, 2021 / 03:00 PM IST
Finance Minister Nirmala Sitharaman, while presenting the 2021-22 Union Budget, had said that the privatisation of the three entities would be carried out this year.

Finance Minister Nirmala Sitharaman, while presenting the 2021-22 Union Budget, had said that the privatisation of the three entities would be carried out this year.

The government may introduce a bill in the Parliament removing the clause that mandates it to hold 51 percent stake in insurance companies. The draft bill is currently with the Union Cabinet for approval, a report in The Times of India said citing official sources.

The move would allow foreign companies to hold upto 74 percent stake in the divested general insurance company. The insurance company, as yet unidentified, could be one among National Insurance, United India Insurance and Oriental Insurance.

Moneycontrol could not independently verify the report.

Finance Minister Nirmala Sitharaman, while presenting the 2021-22 Union Budget, had said that the privatisation of the three entities would be carried out this year.

“Other than IDBI Bank, we propose to take up the privatisation of two public sector banks and one general insurance company in the year 2021-22,” Sitharaman had said.

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The Cabinet had also approved the government and LIC to shed their 100 percent stake in IDBI Bank. The Reserve Bank of India does not consider IDBI Bank a state-owned lender because its majority shareholder is LIC and not the Central government.

In her Union Budget 2021 speech, said the government had set a divestment target of Rs 1.75 lakh crore for the fiscal, of which the majority was expected to be met through stake sale in public sector companies. So far, only Rs 7,645.70 crore of this target has been met.
Moneycontrol News
first published: Jul 26, 2021 03:00 pm

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