Saturday, August 13, 2011

IRDA TIGHTENS STAKE TRANSFER, DILUTION OF OWNERSHIP IN INSURANCE COMPANIES

The Insurance Regulator aims to control transfer and dilution of ownership in insurance companies similar to what the Reserve Bank of India (RBI) does with banks, to prevent financial investors from flipping investments for short-term gains that may hurt long-term prospects. The Insurance Regulatory and Development Authority (IRDA) has proposed a series of measures including mandatory prior approval for anyone to raise stake beyond 5%, and anyone keen to buy 1% or more should seek regulatory approval.

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