FM Sitharaman calls for a balance between regulations and pro-growth mindset - The Economic Times Video
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Business Standard
6 minutes ago
- Business Standard
Raising FDI limit for insurers to 100% will create jobs: FM Sitharaman
The proposed raising of FDI limit in Indian insurance companies to 100 per cent would bring more players into the market and generate employment opportunities, Finance Minister Nirmala Sitharaman informed Parliament on Tuesday. Further, she said, "improved technologies and automation would lead to faster underwriting, claim processing leading to improved turnaround time thereby reducing cost and enhancing overall efficiency of the sector." The increase in FDI in Indian insurance companies from 74 per cent to 100 per cent was announced in the Union Budget on February 1, 2025. The Insurance Act, 1938 governs investment by insurers with a strong emphasis on safety, liquidity, and regulatory oversight by aligning investment by insurers with policyholder interests. The Act stipulates time, manner, form, conditions and instruments allowed for investment. Insurers are mandated to invest a specified percentage of funds in government securities and other approved securities as specified by Insurance Regulatory and Development Authority of India (IRDAI). "Additionally, the Act does not permit Indian insurance companies to invest any of their funds outside India. Hence, all the funds of insurance companies must be compulsorily invested in India," she said in a reply in the Rajya Sabha. In order to ensure financial stability in the insurance sector and protection of policyholders, she said, the Act further mandates every insurer to maintain at all times, an excess of assets over liabilities of not less than 50 per cent of the minimum capital amount. Irdai further mandates insurers to maintain the control level of solvency of 150 per cent at all times, she said. Further, in case of an insurer acting in a manner prejudicial to the policyholders' interests, Irdai is empowered by the Act to supersede the Board of such insurance company and appoint an Administrator to manage the affairs of the insurance company. Besides, she said, the regulatory oversight of the Irdai ensures transparency and policyholder protection by promoting fair business practices, solvency monitoring, supervision and efficient grievance redressal. As per the Companies Act, 2013, all insurance companies are board- governed entities and are required to be compliant with the Companies Act, 2013 at all times for all governance matters. This, alongside Indian Insurance Companies (Foreign investment) Rules, 2015 governs various aspects of operations including dividend payment, repatriation of profit and composition of Board of Directors for insurance companies. "All these provisions and mechanisms ensure adequate checks and balances for conduct of business of insurance in India and act as safeguards," she said. Replying to another question, Sitharaman said the maximum continuous tenure of directors of cooperative banks (excluding Chairperson and Whole-time Directors) has been extended from 8 to 10 years following the recent amendment in Section 10A (sub section 2a (i)) of the Banking Regulation Act 1949 (BR Act). This provision has come into effect from August 1, 2025, she added.
The Print
35 minutes ago
- The Print
Parl panel urges CCI to review deal value threshold, address lack of resources & funding concerns
In the director general's office, out of 41 sanctioned posts, only 17 were filled in 2020-21. The number rose to 23 in 2022-23, but dropped to 16 in 2023-24, and further to 13 in 2024-25, the report said. In its submission before the parliamentary panel, the MCA, under which CCI comes, has also acknowledged a 'huge gap' between the sanctioned strength and the actual staff. The committee has recommended that the MCA, in collaboration with the CCI, must expedite a cadre restructuring proposal and increase the sanctioned strength of the CCI, particularly for specialised roles in the Digital Markets Division (DMD). Formed in September 2024 with a strength of seven people, the CCI's DMD is a specialised unit to address the challenges of regulating digital markets. There is a proposal under consideration with the MCA to create an additional 55 posts to address the shortage of resources. 'Efforts should be made to attract and retain top talent, including data scientists, technologists, and market analysts, by exploring flexible engagement models (e.g., short-term contracts for experts),' the committee said. The panel noted that rapid adoption of digital technologies presents both 'immense opportunities and significant challenges for competition regulation', but at the same time, the unique characteristics of digital markets, such as network effects and data advantage, have led to a concentration of economic power in a few large technology platforms that act as 'gatekeepers'. 'This necessitates a nuanced regulatory approach to balance innovation incentives with the imperative of maintaining fair competition,' the report reads. 'CCI imposing penalty, but not realising it' While acknowledging the CCI's effectiveness in disposing of cases and imposing penalties, the parliamentary panel also highlighted its ineffectiveness in realising those penalties due to litigation. In 2022-23, the CCI imposed penalties of Rs 2,672 crore, while realising only Rs 1,340 crore (50 percent). The rest was stalled due to litigation, the report said. 'As of April 30, 2025, out of a total imposed penalty of Rs 20,350.46 crore, a massive amount of Rs 18,512.28 crore has been either stayed or dismissed by appellate courts,' the committee stated in the report. 'While the CCI is effective at collecting penalties that are not under litigation, its overall enforcement is significantly undermined by legal challenges.' To address this, the CCI is planning to implement a 'new provision mandating a 25 percent pre-deposit for appeals'. This would enable the company to deposit 25 percent of the penalty amount before filing an appeal. The committee endorsed this provision, but also asked the CCI to 'adopt robust legal defence strategies' that would translate actions into tangible deterrence. (Edited by Sugita Katyal) Also Read: High-level policy change causes ripples in Railways, pushback from business houses & within
Time of India
39 minutes ago
- Time of India
Raising FDI limit for insurers to 100% will generate employment opportunities: FM Nirmala Sitharaman
The proposed raising of FDI limit in Indian insurance companies to 100 per cent would bring more players into the market and generate employment opportunities, Finance Minister Nirmala Sitharaman informed Parliament on Tuesday. Further, she said, "improved technologies and automation would lead to faster underwriting, claim processing leading to improved turnaround time thereby reducing cost and enhancing overall efficiency of the sector." Finance Value and Valuation Masterclass Batch-1 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass - Batch 2 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass - Batch 3 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals By Vaibhav Sisinity View Program Finance Value and Valuation Masterclass - Batch 4 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program The increase in FDI in Indian insurance companies from 74 per cent to 100 per cent was announced in the Union Budget on February 1, 2025. The Insurance Act, 1938 governs investment by insurers with a strong emphasis on safety, liquidity, and regulatory oversight by aligning investment by insurers with policyholder interests. The Act stipulates time, manner, form, conditions and instruments allowed for investment. Insurers are mandated to invest a specified percentage of funds in government securities and other approved securities as specified by Insurance Regulatory and Development Authority of India (IRDAI). Live Events "Additionally, the Act does not permit Indian insurance companies to invest any of their funds outside India. Hence, all the funds of insurance companies must be compulsorily invested in India," she said in a reply in the Rajya Sabha. In order to ensure financial stability in the insurance sector and protection of policyholders, she said, the Act further mandates every insurer to maintain at all times, an excess of assets over liabilities of not less than 50 per cent of the minimum capital amount. Irdai further mandates insurers to maintain the control level of solvency of 150 per cent at all times, she said. Further, in case of an insurer acting in a manner prejudicial to the policyholders' interests, Irdai is empowered by the Act to supersede the Board of such insurance company and appoint an Administrator to manage the affairs of the insurance company. Besides, she said, the regulatory oversight of the Irdai ensures transparency and policyholder protection by promoting fair business practices, solvency monitoring, supervision and efficient grievance redressal. As per the Companies Act, 2013, all insurance companies are board- governed entities and are required to be compliant with the Companies Act, 2013 at all times for all governance matters. This, alongside Indian Insurance Companies (Foreign investment) Rules, 2015 governs various aspects of operations including dividend payment, repatriation of profit and composition of Board of Directors for insurance companies. "All these provisions and mechanisms ensure adequate checks and balances for conduct of business of insurance in India and act as safeguards," she said. Replying to another question, Sitharaman said the maximum continuous tenure of directors of cooperative banks (excluding Chairperson and Whole-time Directors) has been extended from 8 to 10 years following the recent amendment in Section 10A (sub section 2a (i)) of the Banking Regulation Act 1949 (BR Act). This provision has come into effect from August 1, 2025, she added.
