The Union Cabinet on Wednesday approved a clutch of decisions on the economic front and approved the Insurance (Amendment) Bill paving the introduction of the legislation in Parliament.
The bill seeks to raise the composite foreign investment cap in the sector to 49% from the existing 26% and is expected to have all the amendments approved by a select committee of Parliament. The bill is likely to be introduced in the Rajya Sabha on Thursday.
The insurance Bill has been pending in Parliament for several years and its passage is expected to attract foreign capital while strengthening the sector. It has been identified as one of the key reforms by the Narendra Modi administration and the parliamentary approval to the bill is expected to add to the reform credentials.
"The bill is aimed at removing archaic and redundant provisions in the relevant legislations and to enable the insurance sector to work for the betterment of the insured with greater efficacy," a government statement said.
The cabinet also allowed public sector banks to raise capital to meet their additional capital requirements under BASEL-III by diluting government holding upto 52% in a phased manner.
Out of 27 PSBs, the government controls 22 through majority holding. In the remaining 5 banks, SBI holds majority stake. These 27 PSBs control 70% of total branches, deposits and credit in the Indian banking system. The government has regularly been infusing incremental capital in the state run banks.
The bill seeks to raise the composite foreign investment cap in the sector to 49% from the existing 26% and is expected to have all the amendments approved by a select committee of Parliament. The bill is likely to be introduced in the Rajya Sabha on Thursday.
The insurance Bill has been pending in Parliament for several years and its passage is expected to attract foreign capital while strengthening the sector. It has been identified as one of the key reforms by the Narendra Modi administration and the parliamentary approval to the bill is expected to add to the reform credentials.
"The bill is aimed at removing archaic and redundant provisions in the relevant legislations and to enable the insurance sector to work for the betterment of the insured with greater efficacy," a government statement said.
The cabinet also allowed public sector banks to raise capital to meet their additional capital requirements under BASEL-III by diluting government holding upto 52% in a phased manner.
Out of 27 PSBs, the government controls 22 through majority holding. In the remaining 5 banks, SBI holds majority stake. These 27 PSBs control 70% of total branches, deposits and credit in the Indian banking system. The government has regularly been infusing incremental capital in the state run banks.
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