RBI Asks Banks To Limit Stake In Insurance Sector

The Reserve Bank of India has requested banks to dilute their stake in the capital intensive insurance sector to 20%, reducing the limit to over half. The regulator urged banks to focus on the dominant area of business instead of the insurance sector, seen as a 'money guzzling business,' Earlier, banking institutions were eligible to hold a 50% stake in insurers. Interestingly, the move came after the Centre increased the FDI cap to 74%.