09 April, Mumbai
The Reserve Bank has notified government’s decision to raise foreign direct investment (FDI) limit in the insurance sector to 49 per cent.
In a notification issued in Mumbai Wednesday , RBI said the extant FDI policy for insurance sector has since been reviewed and further liberalised.
With this, the RBI has included a new term ‘Other Insurance Intermediaries appointed under the provisions of Insurance Regulatory and Development Authority Act, 1999’ under the definition of ‘Insurance’.
The notification follows Department of Industrial Policy and Promotion (DIPP) press note in March regarding operationalisation of increased FDI limit effective from April 17, 2014.
The RBI adds that an Indian insurance company shall ensure that its ownership and control remains at all times in the hands of resident Indian entities. Any increase of foreign investment of an Indian insurance company shall be in accordance with the pricing guidelines specified by Reserve Bank under the Foreign Exchange Management Act, 1999.