IRDAI APPROVES UNION BANK TO CONTINUE WITH ITS 30% HOLDING IN INDIA FIRST LIFE INSURANCE

    On 22 March, 2020 Insurance Regulatory And Development Authority (IRDAI) has approved the proposal of the state owned lender Union Bank of India ( which holds 25.1% stake in Star Union Dai-Chi Life ) to continue with its 30% holding in India first life Insurance.

   The holding is with condition that the lender will not exercise arrangement or any control over the Insurer's management and in appointing separate directors on the board or India first and star Union Dai-Chi and case of any conflicts in the decision will be taken up with the RBI ( competent authority).

  MAJOR HIGHLIGHTS 

  (1)  the authority will permit Union Bank of India and Insures promoted by it a period of one year to hold existing shares of the Andhra Bank in India first life Insurance for a period of 12 months. Following are the merger ( merger of UBI, corporation bank and Andhra bank) and recognized the arrangement to remove conflicts of interest issues which have arisen from the merger.

  (2)  As per IRDAI's guidelines , there is a restrictions that a lender must not own more than 10% stake in two Insurance companies and cannot exercise management control in India first and have the same directors for Insurance promoted by the bank . The bank was expected to remove the entire stake or a considerable part of India First Life Insurance as per IRDAI's guidelines.

 (3)  The bank received a promoter stake in India first Life Insurance in April, which was previously held by Andhra Bank following it's 'mega '  merger on April 1st with Andhra Bank and Corporation Bank .

      KEY POINT : As of now, BANK OF BARODA is the biggest stakeholder in India First Life Insurance with 44 % stake. Camel point Investment , a Mauritius based company owned by private equity Investor Warburg Pincus as the remaining 26% share.

    BACKGROUND : UNION BANK has sent a proposal to seek permission to continue with its existing holding in IFI and Star Union Dai-chi for an extended period of atleast one year on March 7.

ABOUT UNION BANK OF INDIA : 

      HEADQUARTER - MUMBAI , MAHARASHTRA

      CHAIRMAN AND PART TIME NON OFFICIAL DIRECTOR - KEWAL HANDA

       MANAGING DIRECTOR(MD) AND CHIEF EXECUTIVE OFFICE (CEO) - RAJ KIRAN RAI G.

ABOUT IRDAI :

       HEADQUARTER - HYDERABAD , TELANGANA.

        CHAIRMAN - SUBHASH C. KHUNTIA.