The Finance Ministry on Wednesday said the public sector insurance behemoth lIC can increase its investment in companies up to 25 per cent from the current 20 per cent under special circumstances.
“lIC’s investment norms at the moment is settled at 20 per cent but in special circumstances it can go up to 25 per cent. In case lIC wants, the board can take this to 25 per cent,” Financial Services Secretary Rajiv Takru said. He was talking to reporters on the sidelines of an insurance summit organised by the industry body CII here. Interestingly, the past IRDA chairman J Harinarayan had opposed the move to increase the equity exposure limit of lIC, saying the move was “imprudent”.
Earlier this year, the government had proposed to allow lIC to invest up to 30 per cent in a single company. lIC for long has been perceived as the last resort for the government to meet its divestment target, though the Centre has denied it. Meanwhile, Takru expressed concern over the rising bad loans in the banking system saying “this is a matter of concern.”