Insurance cos to be permitted to invest in SEZs

October 30, 2006	(Be the first to rate this story!)  Loading ...
Print This Story   Email This Story Subscribe Newsletter

Insurance companies can invest in special economic zones (SEZs), particularly in infrastructure such as roads and power plants and other facilities, reports Business Line.

Depending on the activity that is being pursued, investment by insurance companies will be allowed. If a power plant is being set up and the tenure of investment is 15-20 years, it would qualify for infrastructure investment, sources added.

According to insurance regulation, infrastructure includes roads, power plants, irrigation and housing. While it does not include SEZs, the applications would be scanned based on the nature of activity, sources added.

Insurance companies can invest up to 15% of their total investments in infrastructure. LIC has invested Rs 596.25 billion in the infrastructure and social sectors as on March 31, 2006.

The Reserve Bank of India has expressed reservations on investments in SEZs. It has also capped investment by banks in SEZs by categorising them as real estate.

For setting up an insurance company in an SEZ, extant requirements would apply. A new company will have to begin with a minimum capital base of Rs 1000 million and the FDI restriction of 26% will hold.

Source: www.myiris.com

News Published Under:   Special Economic Zones |

Comments