FDI LIMIT IN INSURANCE SECTOR INCREASED FROM 49% TO 74% AND FOREIGN OWNERSHIP AND CONTROL ALLOWED WITH SAFEGUARD

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The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman departs from North Block to Rashtrapati Bhavan and Parliament House, along with the Minister of State for Finance and Corporate Affairs, Shri Anurag Singh Thakur and the senior officials to present the General Budget 2021-22, in New Delhi on February 01, 2021.
The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman departs from North Block to Rashtrapati Bhavan and Parliament House, along with the Minister of State for Finance and Corporate Affairs, Shri Anurag Singh Thakur and the senior officials to present the General Budget 2021-22, in New Delhi on February 01, 2021.
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ASSET RECONSTRUCTION COMPANY LIMITED AND ASSET MANAGEMENT COMPANY TO BE SET UP

Rs. 20,000 CRORE RECAPITALIZATION OF PSBs DURING 2021-22

DICGC ACT TO BE AMENDED TO GIVE DEPOSITORS EASY AND TIME BOUND ACCESS TO THEIR DEPOSITS TO THE EXTENT OF INSURANCE COVER

MINIMUM LOAN SIZE ELIGIBLE FOR DEBT RECOVERY UNDER THE SARFAESI ACT, 2002 TO BE REDUCED FROM Rs. 50 LAKHS TO Rs. 20 LAKHS FOR NBFCs WITH ASSET SIZE OF     Rs. 100 CRORE

by PIB Delhi

       While presenting the Union Budget 2021-22 in Parliament today the Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman announced that the Government will amend the Insurance Act, 1938 to increase the permissible FDI limit from 49% to 74% and allow foreign ownership and control with safeguards. Under the proposed new structure, the majority of Directors on the Board and key management persons would be resident Indians, with at least 50% of Directors being Independent Directors, and specified percentage of profits being retained as general reserve.

Stressed Asset Resolution by setting up a New Structure

The Finance Minister stated that an Asset Reconstruction Company Limited and Asset Management Company would be set up to consolidate and take over the existing  stressed debt and then manage and dispose off the assets to Alternate Investment Funds and other potential investors for eventual value realization. The move will help the Public Sector Banks to manage their stressed assets.

Recapitalization of PSBs

In order to consolidate the financial capacity of Public Sectors Banks, the Government has proposed further recapitalization of Rs. 20,000 crore during the fiscal 2021-22.


Deposit Insurance

The Finance Minister further stated that the Government had, last year, approved an increase in the Deposit Insurance cover for bank customers from Rs. 1 lakh to Rs. 5 lakhs. In order to help depositors of banks that are currently under stress, the Government will move an amendment to the DICGC Act, 1961 in the current Parliament Session to streamline the provisions, so that if a bank is temporarily unable to fulfil its obligations, the depositors of such a bank can get easy and time-bound access to their deposits to the extent of the deposit insurance cover.

To improve credit discipline while continuing to protect the interest of small borrowers, for NBFCs with minimum asset size of Rs. 100 crores, the minimum loan size eligible for debt recovery under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 is proposed to be reduced from the existing level of Rs. 50 lakhs to Rs. 20 lakhs, the Minister added.

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Antara Tripathy M.Sc., B.Ed. by qualification and bring 15 years of media reporting experience.. Coverred many illustarted events like, G20, ICC,MCCI,British High Commission, Bangladesh etc. She took over from the founder Editor of IBG NEWS Suman Munshi (15/Mar/2012- 09/Aug/2018 and October 2020 to 13 June 2023).
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