Bill to raise FDI in insurance in Budget session

The government said on Thursday it will bring a legislation next month to increase foreign direct investment in insurance sector to 49 per cent from 26 per cent at present.

"Finance Minister P Chidambaram indicated that a Bill will be introduced in Parliament next month to increase FDI limit in insurance to 49 per cent from 26 per cent," UK Chancellor of Exchequer Gordon Brown said.

Speaking to reporters after he along with Chidambaram launched the India-UK Economic and Financial Dialogue, the visiting minister said it was conveyed to him that companies with unique structure like Lloyds of London would be allowed to offer reinsurance

services in India.

During the meeting, the opening up of the banking sector also came up and India sought greater freedom to its banks to operate in UK. "We hope UK will give more licences to Indian banks," Chidambaram said, adding that Standard Chartered Bank of UK was the largest foreign bank in India.

"I am sure they will continue to grow organically in India," he said. The finance minister's emphasis on organic growth points to the fact that the freedom for foreign banks to acquire banks in India is unlikely to come soon.

At the launch of financial dialogue, both sides also discussed ways to stem the flow of finances to terrorists.