New Delhi: The Centre has approved financial infusion in three public sector general insurance companies on Wednesday.
The three Public Sector General Insurance Companies are Oriental Insurance Company Limited, National Insurance Company Limited and United India Insurance Company Limited.
A Cabinet meet chaired by Prime Minister Narendra Modi has approved the capital infusion for an overall value of Rs12,450 crore.
This is including Rs 2,500 crore infused in Financial Year 2019-20. The process of merger has been ceased so far in view of the current scenario and instead, the focus shall be on their profitable growth.
The capital infusion of Rs 3,475 crore will be allocated to three public sector general insurance companies viz. OlCL, NICL and UIICL as the first tranche in the current financial year. The balance amount will be released in one or more tranches. To give effect to the infusion, the authorised capital of NICL will be increased to Rs 7,500 crore and that of UIICL and OlCL to Rs 5,000 crore respectively.
The impact of the capital infusion will enable the three PSGICs to improve their financial and solvency position and at the same time meet the insurance needs of the economy.
The immediate financial implication would be Rs 3,475 crore as a result of capital infusion in three PSGICs namely OlCL, NICL and UIICL as the first tranche which will be followed by Rs 6,475 crore.
Given the current scenario, the process of merger has been ceased so far and the focus shall be on their solvency and profitable growth.