Against the backdrop of its disinvestment plan, the government will soon come out with a notification, allowing Life Insurance Corporation of India (LIC) to invest up to 30 per cent of its funds in listed and non-listed companies.
It was in the process and the notification would be issued soon, a Finance Ministry official said here.
It was already given in the LIC Act, 1959 that LIC can invest up to 30 per cent of its total fund in a single entity, the official said.
However, the Insurance Act stipulates that an insurance company can invest only 10 per cent of the fund or have 10 per cent of a company’s stake, whichever is lower, in an entity.
Meanwhile, the Law Ministry has already clarified that the LIC Act, 1959 supersedes the Insurance Act, 1999.
The draft notification about the investment ceiling was issued a couple of months ago.
The government has proposed to raise about Rs.30,000 crore from disinvestment during the current fiscal.
So far, the government has realised Rs.6,900 crore from disinvestment.
As of today, the LIC has stake over 10 per cent in many companies, including L&T and Corporation Bank.
Insurance regulator IRDA, however, has expressed reservation over raising the investment ceiling for LIC beyond 10 per cent. — PTI
Capital infusion in PSBs
On capital infusion in public sector banks, the official said the Cabinet would soon consider Rs.12,000 crore recapitalisation proposal of the Finance Ministry.