FDI hike in Insurance to 49%

By agencies   |   Wednesday, 23 November 2005, 08:00 Hrs
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NEW DELHI: Insurance regulator IRDA has pitched for a hike in insurance FDI cap from 26 to 49 percent. It also said it will soon submit a report to the government for a comprehensive legislation on this.

IRDA chairman C S Rao said since insurers need to infuse more capital to sustain their growth, IRDA has been advocating raising the FDI cap so that foreign players could bring in additional funds and Indian partners are not strained.

"It need not be repeated. We have always said it (FDI cap) should be raised to 49 percent," Rao said.
Foreign partners in companies like ICICI Prudential Life, Max New York Life, Aviva and ING Vysya have been demanding hike in FDI cap for a long time.

Government has notified the FDI hike in civil aviation from 40 to 49 percent and in telecom from 49 to 74 percent, but is yet to do so for insurance, as it requires amendment in the IRDA Act.
Apart from the FDI, the Finance Ministry is also awaiting IRDA's report on coming up with a comprehensive legislation on insurance.

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