Union Finance Minister Nirmala Sitharaman is launching Mutual Credit Guarantee Scheme for MSMEs in Mumbai on Monday
Govt asks private life insurance companies to increase the free look period for policyholders from one month to one year.
The Centre is working on more reforms in the insurance sector, in which 100 per cent foreign direct investment (FDI) has been allowed. Guardrails are being put so that citizens’ money towards premium payment for insurance is kept within the country, Union Finance Minister Nirmala Sitharaman
Mumbai: M Nagaraju, secretary, Department of Financial Services, on Monday, said the government is “actively considering” raising the Deposit Insurance and Credit Guarantee Corporation (DICGC) cover for bank deposit beyond Rs 5 lakh.
However, no timeline has been specified on when the government would approve the proposal, said Nagaraju.
“On the point about increase in deposit insurance, that is under consideration of the government, as and when the government approves, we will notify,” Nagaruju said during a press conference here.
He further said that the government has asked private life insurance companies to increase the free look period for policyholders from one month to one year.
At present, the free look period is upto 30 days within which a policy holder can return a life insurance policy and get back the premium paid to insurers without any deductions.
“Public sector companies have been asked to introduce ‘call back’ in insurance policies, i.e., once the product is sold, a call back is sent to the customer to understand whether he/she is happy with the product or if they want to surrender. We have also asked private sector companies to do the same to prevent mis-selling, ” said Nagaraju.
The government has also asked banks and financial institutions that only trained agents be able to sell policies. These are the measures we have taken to reduce mis-selling of policies,” Nagaraju said.
On the Insurance Amendment Bill, Nagaraju said internal consultations have been completed for the same, and it includes allowing composite licences, details regarding investments and the repatriation of profits in case of foreign direct investment (FDI).
“We have almost completed the internal governmental consultations. Then, we will take the next course of action by bringing the proposed amendment bill to Parliament. Once it is approved, those rules will also be notified so that all the reforms we intend to do in the insurance sector to improve penetration will be done through these measures,” Nagaraju said.
Meanwhile, Union Finance Minister Nirmala Sitharaman said in Mumbai India is delivering good returns to investors who are booking profits.
Replying to a question on selling by foreign institutional investors (FIIs), Sitharaman said India has an environment where investments are yielding good returns.
Sithraraman further stated that the Centre is working on more reforms in the insurance sector, in which 100 per cent foreign direct investment (FDI) has been allowed.
The current Budget proposes to raise the FDI cap for the insurance sector from 74 per cent to 100 per cent.
Guardrails are being put so that citizens’ money towards premium payment for insurance is kept within the country, she said.
Finance Secretary Tuhin Kanta Pandey added that in times of global volatilities like the one that is being witnessed, the FIIs tend to go back to their country of origin which is mostly the US.
He said India is the fastest growing major economy and will continue to grow going ahead as well.
Pandey added that in times of global volatilities like the one that is being witnessed, the FIIs tend to go back to their country of origin which is mostly the US.
He said India is the fastest growing major economy and will continue to grow going ahead as well.
To a question on inflation, Sitharaman said the government’s supply measures and the Reserve Bank’s demand-side initiatives are working in tandem to control price rise.
The Centre on Monday launched the ‘Mutual Credit Guarantee Scheme for MSMEs’, which was announced in the Union Budget 2024-25 to boost the micro, small, and medium enterprises.
The scheme facilitates collateral-free loans to MSMEs by providing loans up to Rs 100 crore for the purchase of plant, machinery, or equipment.
The scheme would provide 60 per cent guarantee coverage by the National Credit Guarantee Trustee Company Ltd (NCGTC) to member lending institutions (MLIs) for a credit facility up to Rs 100 crore, sanctioned to eligible MSMEs under MCGS-MSME for the purchase of equipment/machinery.
Launching the scheme here, Union Finance Minister Nirmala Sitharaman also distributed sanction letters to MSMEs eligible under the scheme in Mumbai.
The scheme is expected to facilitate easy availability of credit for MSMEs and give a major boost to the manufacturing sector in India.
According to the scheme, the borrower should be an MSME with a valid Udyam Registration Number, the loan amount guaranteed should not exceed Rs 100 crore, the project cost could be of higher amounts also and the minimum cost of equipment /machinery is 75 per cent of the project cost.