Monday, March 28, 2011

Bill to allow 49% FDI in Insurance in the works

A new bill which allows 49% Foreign Direct Investment (FDI) in the Insurance sector could turn into a reality. FM Pranab Mukherjee had mentioned this little snippet of information on the centenary celebrations of the Central Bank of India.

FM has started talking to the various political parties. A Financial Sector Legislative Reforms Commission (FSLRC) has also been set up. The first meeting of this commission will be held this week. Broadly the functions of this commission would be to make the current financial laws more fool proof and make them more viable to the market requirements.

Resistance is expected to this bill with many political parties against any kind of foreign involvement in the Indian markets. But the Warren Buffet where one of the richest men in the world mentioned that India needed to increase its FDI quota in its Insurance sector. He specifically pointed out that the Indian Insurance sector was suffering and will continue to do so if the quota is not improved.

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