Exclusive: India’s insurance regulator agrees with t​his unwritten rule from RBI

While the IRDAI Chairman made it clear that the insurance authority does not have a stated view on the matter, for banks, according to him, it is a choice between investing their money in insurance companies or using it to extend credit which is their core business.

*Recently, the RBI allowed Axis Bank to acquire 20 percent stake in Max Life Insurance.

While banks may be constrained in their ownership of insurance companies, Panda feels there is no dearth of investors willing to put money into the insurance sector in India. He also doesn’t see any capital constraint for existing insurance companies or those wanting to set up a new entity.

Responding to a question about the weak response from foreign investors in the insurance sector, Panda said that the new 74 percent cap with minimum conditions on management control will certainly attract lot of interest.