The Government has allowed Indian promoters of insurance joint ventures to pare their stake to 26 per cent even before 10 years of operation. The formal notification likely to be made public on Wednesday.
This is being done even when the Government has been unable to pass the Bill which will allow FDI cap in insurance joint ventures from 26 per cent to 49 per cent. The Parliamentary Standing Committee on finance is considering the Bill.
However, the current proposal is in sync with the insurance regulator Insurance Regulatory and Development Authority's (IRDA) thinking. They are expected to bring the guidelines for public offer for insurance companies soon.
The latest stand of the Government is expected to help insurance companies to raise capital. Many insurance companies are in need of capital for expansion of business.