To improve the financial performance of Insurance Companies, capital amounting to Rs 3000 crores will be infused by the Finance Ministry in the current quarter.
Previously, the cabinet had decided to upscale National Insurance Company’s authorized share capital to Rs 7,500 crore.
Authorized share capital of United India Insurance Company Limited (UIICL) and Oriental Insurance Company Limited (OICL) were also increased to Rs 5,000 crore each.
This decision was taken with an aim to give effect to the capital infusion decision.
However, the infusion will be done after the supplementary demand for grants is passed by Parliament which will reconvene on March 8.
The target is to enable the three public sector general insurance companies to improve their financial and solvency position along with meeting the insurance needs of the economy.
It further aims to absorb changes and enhance the capacity to raise resources and improve risk management.
Also, there was a 3 percent increment in insurance related stocks such as the General Insurance Corporation of India.
In addition to this, ICICI Prudential Life Insurance Company was trading at Rs 493.55, up Rs 6.15, or 1.26 percent.
According to the Union Budget 2021-22, an estimated hike of up to 74 percent of the foreign direct investment (FDI) limit in India’s insurance sector is expected.
In fact, the proposal is projected as a positive development and growth for the country’s insurance industry.
The Parliament also approved for gross additional expenditure of Rs 6.28 lakh crore for 2020-21 as part of the second and final batch of supplementary demands for grants.
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