Cabinet clears Rs.12450 Cr capital infusion in 3 Public Sector General Insurance Companies, Rs.3475 Cr to be infused immediately
New Delhi : The Union Cabinet chaired by the Prime Minister Narendra Modi on Wednesday approved the capital infusion for an overall value of Rs.12,450 crore in three Public Sector General Insurance Companies (PSGICs) – Oriental Insurance Company Limited (OlCL), National Insurance Company Limited (NICL) and United India Insurance Company Limited (UIICL) .
Out of the Rs.12450 Crore, Rs.2500 Crore has already been infused in 2019-20 financial year and Rs. Rs.3,475 crore will be released immediately. The balance Rs. 6475 crore will be infused later in one or more tranches.
The Cabinet also approved increase in authorised share capital of NICL to Rs.7,500 crore and that of UIICL and OICL to Rs 5,000 crore respectively to give effect to the capital infusion. Further, the process of merger has been ceased so far in view of the current scenario and instead, the focus shall be on their profitable growth.
To give effect to the infusion, the authorised capital of NICL will be increased to Rs. 7,500 Crore and that of UIICL and OlCL to Rs.5,000 Crore respectively.
The capital infusion will enable the three PSGICs to improve their financial and solvency position, meet the insurance needs of the economy, absorb changes and enhance the capacity to raise resources and improved risk management.