Insurance Companies To Invest More Funds In Banks
BANGALORE: Good news for the insurance companies! Now they can invest more funds in the banks and financial institutions as the government found new ways to introduce additional capital into nationalized lenders. According to a government official, the government has asked the Insurance Regulatory and Development Authority to increase their exposure limit to 30 percent, which was 25 percent earlier, towards banking sector. 
Also he said "IRDA has some concerns that are being looked into," and added that a decision will be soon taken, on who will be the largest insurer in the country, as Life Insurance Corporation has also reached to an exposure limit of 22 percent, reports Economic Times.
According to Reserve Bank of India, in order to meet the Basel-III norms the nationalized banks need to have an amount of almost 
4.15 lakh crore out of which 1.5 lakh crore will be for equity capital and 2.75 lakh crore for the non-equity capital. Also these Basel-III capital adequacy ratios will be synchronized by 2018.
Banks have recommended the pension and insurance regulators to re-examine their regulations, in order to allow more or additional investment in tier-I capital of banks, said the finance minister P Chidambaram. He also added that "PFRDA has made some changes but we will talk to IRDA.” The government already allocated 14,000 crore for capital infusion in 2013-2014, and now the government has allocated 11,200 crore for 2014-2015.
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