In pursuance of the enactment of Insurance Regulatory & Development Authority (IRDA) Act, 2013, the government has raised the limit of Foreign Direct Investment (FDI) in pension sector to 49% in line with the FDI cap in the insurance sector. A press note to this effect has been issued by the Department of Industrial Policy and Promotion (DIPP) on Monday.
The FDI cap in the sector has been hiked to 49% and that includes foreign investment in the forms of FPI, FII, QFI, FVCI, NRI and DR. Further, the formal release also states that while no government approval is required till 26 per cent, FIPB nod is required for investment beyond 26% and up to the cap of 49%. Besides, this all investment in the range of below 26% or above will have to abide by pension sector regulator -- PFRDA.
It was back in December last year that the government allowed 49% in insurance sector through an ordinance in the parliament, which was later converted into Act. However, the increase in the foreign investment limit in the pension sector comes with certain rider.