The IRDAI may give allowance to public sector banks in holding more than 10% stake in multiple insurance companies, provided that they limit their promoter control to one entity and remain just an investor in others without intruding in management decisions.
The rules underscore that a bank is unable to promote more than one insurance company in the same segment. However, the merger of 10 public sector banks has created an issue since some of the banks are promoters of insurance firms.
“It is not prohibited by regulation but it is prohibited because there will be conflict of interest. We can take care of this by allowing them not to participate in decision-making,” IRDAI Chief Subhash Chandra Khuntia said.
