Insurance Regulator IRDA has approved the 30 per cent stake purchase by Punjab National Bank (PNB) in MetLife India Insurance Company.
The board of the Insurance Regulatory and Development Authority (IRDA) at its meeting held on August 31 approved induction of PNB as a shareholder of the insurance company with a 30 per cent stake, IRDA said in a statement today.
"The Board approved the proposal ... subject to certain conditions inter alia on appointment of Directors on the Board of the insurer by PNB, reduction in the equity stake by some of the existing shareholder and maintaining solvency margin ...," it said.
Last year state-run PNB had announced picking up of 30 per cent stake in MetLife India Insurance at an undisclosed sum.
As per the terms of the deal, US-based MetLife will have an arrangement with the existing shareholders and will raise its stake to 26 per cent within 120 days of operationalisation of the deal.
Currently, MetLife India stakeholders, include Jammu and Kashmir Bank, Shapoorji Pallonji and other investors, besides MetLife.
It is to be noted that PNB in 2010 decided to part ways with its foreign partner Principal Financial Group in a proposed life insurance joint venture it set up four years ago.
PNB bought the entire 26 per cent stake held by Principal Financial Group and the 32 per cent participating interest of domestic firm UK (Berger) Paints in Principal PNB Life Insurance Company Ltd.
PNB's stake in the proposed joint venture was 30 per cent, while that of Vijaya Bank was 12 per cent.
Besides, the IRDA board also approved an amendment to the regulations to include a Limited Liability Partnership (LLP) firm as an Indian promoter. With this regulatory change, domestic LLP would be able to pick up stake in an existing insurance venture or can float a new venture.
"Such an LLP can, however, neither be a foreign LLP nor should any of the partners in the LLP be foreign entities," IRDA said.