Tie up between Banks and Insurance Companies

The Insurance Regulatory and Development Authority (IRDA) has informed that Public Sector Banks have tie-ups with insurance companies to do business.

IRDA has further informed that the transfer of shares between shareholders of insurance companies is governed by the provisions of Section 6A 4(b) of the Insurance Act, 1938 and the guidelines issued by the Authority, viz. Circular No. IRDA/F&A/CIR/ DRSH/183/08/2011 dated August 11, 2011. However, the valuation of shares for inter se transfer between the resident shareholders are governed by the extant Company Law provisions and IRDA has not prescribed any guidelines for valuation of shares for such transfer between two domestic resident companies. Transfer of shares by domestic companies to foreign promoters is guided by compliance with RBI Pricing Guidelines. The Authority monitors the extent of share holding by domestic and foreign promoters in insurance companies for compliance with the FDI guidelines.

This was stated by Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Lok Sabha today.