FEMA Rules Amended to Allow for 20 % FDI in LIC

Published on April 14, 2022
Current Context: Ahead of the mega-IPO of the largest insurer in the country, FEMA rules have been amended to allow 20% FDI in LIC through IPO.
FEMA Rules Amended to Allow for 20 % FDI in LIC
  • DPIIT ( Dept for Promotion of Industry and Internal Trade ) has relaxed the FEMA rules to allow 20% investment through FDI.
  • LIC is slated to undergo Initial Public Offer, therefore, to attract maximum subscription and diversify the basket of investment, DPIIT has taken this decision.
  • Though an amendment can only be brought about through parliamentary procedures, the provision of delegated legislation, however, makes it possible for the executive to make changes to existing law.

Question:

Q.1 What is the permissible limit of investment through FDI in LIC IPO, as brought out by DPIIT by amending FEMA (Foreign Exchange Management Act)?
a. 15%
b. 25%
c. 21%
d. 20%

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