NEW Delhi : The Cabinet Committee on Economic Affairs, chaired by Prime Minister Modi, on Wednesday cleared “in principle” listing of five government-owned general insurance companies on the stock exchanges, divesting its 25% share to the public.
This single step will enable the insurance companies to raise resources from the capital market for fund requirements to expand business, instead of being dependent on the government for the capital infusion.
The companies so divested and put on the stock exchanges are: The New India Assurance, United India Insurance, Oriental Insurance, National Insurance and General Insurance Corporation of India.
An official press note says the decision is to fulfill the promise of public shareholding in these companies by Finance Minister Arun Jaitley in the 2016-17 budget to ensure higher level of transparency and accountability.
Listing on the stock exchanges will automatically necessitate compliance and ccounting requirements of the Securities and Exchange Board of India (SEBI) ensuring transparency and equity in the companies functioning.
It will also improve corporate governance and risk management practices leading to improved efficiency and greater focus on growth, the press note added.
