Page 15 - Banking Finance April 2020

ROUNDUP

that they are doing their best, even de-criminalise provisions in as many as insurer and benefit the insurance in-
during the lockdown. They are certain 37 laws that impact businesses, includ- dustry, Fitch Ratingssaid.
that they'll ensure customer service ing the Partnership Act and Insolvency
without disruption. Social distancing is and Bankruptcy Code, to boost inves- The benefits may trickle down to the
being adhered to as well," the minis- tor confidence and ensure ease of do- entire domestic insurance sector in
ter said via social media. ing business. The Confederation of In- terms of attracting more foreign inter-
est, which could result in an increase
During the calls, the finance minister in- dian Industry has submitted a 12-point in foreign capital inflows into the indus-
structed the heads of all PSBs to ensure plan to Prime Minister Narendra Modi try, it said.
all ATMs and branches remained open and finance minister Nirmala
and to implement social distancing Sitharaman, which includes introduc- Fitch said it expects that the initial
norms at all points. She also asked them tion of a one-time settlement scheme public offering (IPO), once executed,
to ensure adequate liquidity at these lev- and compounding provision. may also encourage some of the other
els to cater to customers' needs. "Divesting criminal penalties from busi- private sector insurance companies to

While acknowledging their efforts the ness laws - unless well-defined criminal list some of their shares in the stock
minister said, "Bank officials and staff actions are found - will strengthen con- market over the medium term, al-
have consistently been on the frontline fidence among young entrepreneurs though the current insurance regula-
in providing services to customers dur- and investors in doing business," tion does not require all insurers to be
ing this time of adversity, whether it is Vikram Kirloskar, President, CII said. listed publicly.
physically providing cash where it is CII has sought intervention of various FM Nirmala Sitharaman had earlier
needed or keeping branches open no arms of the government to examine said Life Insurance Corporation (LIC)
matter what." how the current criminal provisions in will be listed as part of the
The updates come amid rumours that the laws can be treated as civil of- government's disinvestment initiative.
certain bank branches were closed in the fenses with penalties, according to a
Currently, the government owns the
wake of the 21-day lockdown announced statement.
by Prime Minister Narendra Modi. entire 100 per cent stake in LIC.
Sitharaman also took to social media to The recommendations cover 37 laws Fitch further said a publicly listed LIC
announce the various measures PSBs and Acts ranging from the Partnership will be subject to stringent disclosure
had implemented to provide financial Act of 1932 to the Insolvency and requirements stipulated by the Securi-
relief to customers and businesses. Bankruptcy Code of 2016, which it said ties and Exchange Board of India. This
includes offences that are technical or
PSBs are ensuring cashflow mismatches will create a strong culture of compli-
those that do not affect public inter-
and delayed salaries do not further ance and accountability within the in-
est prejudicially.
burden MSMEs and their employees. surer.
In another update through social me- Lately, some commercial and civil dis-
dia, the finance minister said that cor- putes are being treated as criminal "We think the insurer's investment al-
porate affairs secretary Injeti Srinivas complaints, creating fear among com- location decisions will be rationalised
held discussions with industry chamber pany directors, young entrepreneurs too, as major investment decisions
representatives to address their issues, and foreign investors, it said. could be subjected to additional scru-
adding that the ministry would continu- tiny and approvals. LIC is one of the
ously respond to their inputs. Proposed IPO of LIC to prominent institutional investors in
benefit insurance indus- several public sector assets, and in
India pitches for de- multiple instances has obtained excep-
try: Fitch tions from the insurance regulator to
criminallosing 37 laws that
The proposed initial share sale of LIC increase its stake in investee compa-
impact business will improve the accountability and nies above the regulatory ownership

India Inc has sought urgent steps to transparency of the country's largest cap of 15 per cent," it said.

BANKING FINANCE | APRIL | 2020 | 13