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RBI notifies 49 pc FDI in insurance sector

With a view to attract more overseas inflows, the Reserve Bank of India (RBI) on Friday announced that it would raise the Foreign Direct Investment (FDI) limit to 49 per cent in insurance sector under automatic route

RBI notifies 49 pc FDI in insurance sector
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New Delhi

“The extant FDI policy for Insurance sector has since been reviewed by the government and accordingly it has been decided to enhance the limit of foreign investment from 26 to 49 per cent under the automatic route subject to certain terms and conditions which has been notified on March 30,” the RBI said in a notification. 

“No Indian insurance company shall allow the aggregate holdings by way of total foreign investment in its equity shares by foreign investors, including portfolio investors, to exceed 49 per cent of the paid up equity capital of such Indian Insurance company, it added. 

The statement further said, “The foreign investment up to 49 per cent of the total paid-up equity of the Indian Insurance company shall be allowed on the automatic route subject to approval or verification by the Insurance Regulatory and Development Authority of India.” 

Earlier, the clearance of Foreign Investment Promotion Board was necessary for 49 per cent FDI in insurance sector. Only up to 26 per cent FDI was permitted through the automatic route.

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