December 05, 2024 09:53 (IST)
Follow us:
facebook-white sharing button
twitter-white sharing button
instagram-white sharing button
youtube-white sharing button
Devendra Fadnavis picked as BJP legislative party head, set to be Maharashtra CM | Rahul Gandhi, Priyanka Gandhi Vadra's visit to violence-hit Sambhal thwarted | Man tries to shoot Shiromani Akali Dal leader Sukhbir Singh Badal at entrance of Golden Temple, arrested | Joe Biden announces $1 billion humanitarian assistance for 31 African countries during his visit to Angola | South Korean president lifts martial law order hours after imposing it
Union Budget: FDI limit in insurance sector increased from 49 pct to 74 pct
Union Budget

Union Budget: FDI limit in insurance sector increased from 49 pct to 74 pct

| @indiablooms | 01 Feb 2021, 04:09 pm

New Delhi: While presenting the Union Budget 2021-22 in Parliament today the Union Minister for Finance & Corporate Affairs, Nirmala Sitharaman announced that the Government will amend the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% and allow foreign ownership and control with safeguards.

Under the proposed new structure, the majority of Directors on the Board and key management persons would be resident Indians, with at least 50% of Directors being Independent Directors, and specified percentage of profits being retained as general reserve.

Stressed Asset Resolution by setting up a New Structure

The Finance Minister stated that an Asset Reconstruction Company Limited and Asset Management Company would be set up to consolidate and take over the existing  stressed debt and then manage and dispose off the assets to Alternate Investment Funds and other potential investors for eventual value realization.

The move will help the Public Sector Banks to manage their stressed assets.

Recapitalization of PSBs

In order to consolidate the financial capacity of Public Sectors Banks, the Government has proposed further recapitalization of Rs. 20,000 crore during the fiscal 2021-22.

Deposit Insurance

The Finance Minister further stated that the Government had, last year, approved an increase in the Deposit Insurance cover for bank customers from Rs. 1 lakh to Rs. 5 lakhs.

In order to help depositors of banks that are currently under stress, the Government will move an amendment to the DICGC Act, 1961 in the current Parliament Session to streamline the provisions, so that if a bank is temporarily unable to fulfil its obligations, the depositors of such a bank can get easy and time-bound access to their deposits to the extent of the deposit insurance cover.

To improve credit discipline while continuing to protect the interest of small borrowers, for NBFCs with minimum asset size of Rs. 100 crores, the minimum loan size eligible for debt recovery under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 is proposed to be reduced from the existing level of Rs. 50 lakhs to Rs. 20 lakhs, the Minister added.

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.

Support objective journalism for a small contribution.