IRDAI may not take any further regulatory action on Max Life, Axis Bank
The Insurance Regulatory and Development Authority of India (IRDAI) may not take any further regulatory action on Max Life and Axis Bank. There was a fair amount of volatility on both these counters specifically on Max Financial on Friday.
The Insurance Regulatory and Development Authority (IRDAI) may not take any further regulatory action on Max Life and Axis Bank, CNBC-TV18 has learnt.
This comes after the insurance regulator imposed penalty for violation of norms with respect to the transfer of shares in the Axis Bank-Max Life Insurance deal.
There was a fair amount of volatility on both these counters specifically on Max Financial on Friday.
The volatility was on the back of a lot of uncertainty, which came with the regulator's order. There has been a lot more clarity on what's going to be the future course as far as the regulatory approach is concerned.
Just to put things in context – on Friday the insurance regulator first imposed a total penalty of Rs 2 crore on Max Life Insurance, which was to be remitted by Axis Bank, which is the promoter company of Max Life Insurance.
This order was replaced on Sunday with another order from the regulator, where they increased the penalty on Max Life Insurance by another Rs 1 crore, which means a total penalty of Rs 3 crore on Max Life Insurance.
Not just that, they also imposed a Rs 2 crore separate penalty on Axis Bank on charges of getting undue benefits from the transaction between Axis Bank and Max Life. They are supposed to remit this amount to the regulator within 21 days.
This could be the end of the regulatory action on both entities with respect to the transaction that took place. No further regulatory action is expected to be taken by the regulator.
Also, this particular regulatory action won't affect the deal which has been executed between the two parties, that is Axis Bank and Max Life Insurance.
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