FCC Suggested Ministry Of Finance To Allow 74% FDI Insurance Sector

The Union Finance Minister Nirmala Sitharaman on Monday announced an increase in Foreign Direct Investment (FDI) limit in the insurance sector from 49% to 74%. The Fintech Convergence Council (FCC), had submitted this recommendation as a part of its submission to the Ministry of Finance earlier in its Pre-Budget Consultation with the stakeholders. The association had expressed its strong support to revisit the existing limited FDI allowance in the sector.

The industry body had highlighted the issue that FDI in insurance companies was permitted under automatic route up to 49% with a rider that insurance companies should be Indian owned and controlled, i.e. more than 50 percent should be beneficially owned by resident Indian citizens. This restricted the control of the insurance company only to resident Indian citizens.

The association had suggested in its submission that enhancing FDI limits in the insurance sector can help in bringing better technical know-how, innovation, and improving insurance penetration. The announcement in the Budget will be a crucial factor in the growth of the Insurance ecosystem in the country.

Source: Tech Graph

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