These 3 insurance companies will not be merged, Modi government took this decision
The merger of state-run insurance companies Oriental Insurance, National Insurance and United India Insurance has been postponed.
Government will infuse a total capital of 12,450 crore
Merger decision currently banned
The central government has decided to stop the process of merger of three public sector general insurance companies, Oriental Insurance, National Insurance and United India Insurance. Not only this, the government will now provide a capital of Rs 12,450 crore to improve the financial condition of these companies.
The Union Cabinet chaired by Prime Minister Narendra Modi has also approved this decision. “Considering the current situation, the merger process has been postponed for the time being and now the profit of these companies will be focused instead,” an official statement said.
2500 crores have already been given
However, in the proposal to infuse capital of Rs 12,450 crore, an amount of Rs 2,500 crore has already been given. Explain that an amount of Rs 2,500 crore was poured in the financial year 2019-20. Now an amount of Rs 3,475 crore will be released immediately, while the remaining Rs 6,475 crore will be released later. The government has made a provision of Rs 6,950 crore in the budget of 2020-21 to infuse capital in these three companies.
Let us tell you that in 2017 the government listed the two largest insurance companies of the country, New India Assurance Company and General Insurance Corporation of India, through an IPO route. At the same time, the IPO of Life Insurance Corporation of India (LIC) has been announced in this year’s budget. LIC’s IPO is expected by the end of this year.
What is an IPO? Explain that whenever a company or government proposes to sell some shares in front of common people, this process is called Initial Public Offering (IPO). This means to say that the government will put LIC’s IPO in the market for the common people. After this, LIC will be listed on the stock exchange and people will be able to buy shares through shares.
