With reference to the foreign direct investment (FDI) in insurance, consider the following statements:1. Foreign investors will now be able to invest up to 20% in LIC shares under the automatic approval route.2. As per the present FDI policy, the FDI ceiling for public sector banks is 20% on government approval route.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?

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With reference to the foreign direct investment (FDI) in insurance, consider the following statements:

1. Foreign investors will now be able to invest up to 20% in LIC shares under the automatic approval route.

2. As per the present FDI policy, the FDI ceiling for public sector banks is 20% on government approval route.

Which of the statements given above is/are correct?

a)
1 only
b)
2 only
c)
Both 1 and 2
d)
Neither 1 nor 2

Correct answer is option 'C'. Can you explain this answer?

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Most Upvoted Answer

With reference to the foreign direct investment (FDI) in insurance, co...

The Union Cabinet approved changes to India’s foreign direct investment (FDI) policy to allow global investors to participate in the initial public offering of Life Insurance Corporation of India (LIC) shares expected to be launched soon.

Foreign investors will now be able to invest up to 20% in LIC shares under the automatic approval route.
FDI in insurance ventures is already allowed up to 74% under the automatic approval route, but the policy was silent on foreign equity investments into the country’s largest insurer LIC, a statutory corporation set up under an Act of Parliament.
As per the present FDI policy, the FDI ceiling for public sector banks is 20% on government approval route, so it has been decided to allow foreign investment up to 20% for LIC and such other bodies corporate.
The approval has been made automatic for LIC so as to expedite the capital raising plan.
The amendments to the FDI policy come less than two weeks after the draft red herring prospectus (DRHP) was filed with the stock market regulator.

Hence both statements are correct.

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With reference to the foreign direct investment (FDI) in insurance, consider the following statements:1. Foreign investors will now be able to invest up to 20% in LIC shares under the automatic approval route.2. As per the present FDI policy, the FDI ceiling for public sector banks is 20% on government approval route.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?

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