After receiving a rap from IRDAI, Axis Bank said it has entered into revised agreements with Max Financial Services. Under these pacts, Axis will acquire the balance 7 per cent equity in Max Life Insurance at fair market value. This would be done using discounted cash flows instead of valuation according to Rule 11UA of the Income Tax Rules, 1962.
“This revision has been done consequent to the guidance received by Max Life from the IRDAI,” the bank said in a notification to the exchanges.
IRDAI had imposed monetary penalties on Axis Bank and Max Life Insurance because it had found certain violations of its directions in transfer of shares of Max Life between Max Financial Services and Axis Bank as well as its subsidiaries.
Max Life was asked to pay Rs 3 crore as penalty and Axis was told to pay Rs 2 crore.
