Swiss insurance company Zurich Insurance has partnered with Kotak for Rs. 5,560 crore ($670 million) deal has been completed. Under this deal, Zurich Insurance acquired 70% stake in Kotak Mahindra General Insurance. Let us tell you that this deal was announced in November 2023.
Contents
First foreign insurance company to do so
With this deal, Zurich has become the first foreign insurance company to enter India. Because, FDI rules were revised to increase foreign ownership from 49% to 74% in 2021. Kotak Mahindra Bank to invest in insurance subsidiary by March 2024 Rs. 875 crore holding 100% equity of paid-up capital.
In FY 2024, Kotak General’s total premium income from motor insurance will be Rs. 748 crore and income from health insurance was Rs. 620 crores. Tulsi Naidu, CEO (Asia-Pacific), Zurich Insurance Group said, “The acquisition of Kotak General Insurance paves the way for Zurich to play a leading role in a very important growth market.”
He further added, “India’s insurance market offers immense potential and together with Kotak we are committed to support its growth, we have strong expertise in complex risk management bonds, digital capabilities and ability to bridge the insurance protection gap. “Our aim is to create flexibility among Indian consumers.”
Advocacy of tax relief on interest income
SBI Chairman Dinesh Kumar Khara has advocated tax relief on interest income. He said this would help banks to increase savings. Currently, banks have to deduct tax when the interest income from deposits in all branches of banks exceeds Rs 40,000 in a year.
In case of savings account, interest up to Rs 10,000 is exempted from tax. Khara said, if some relief can be given in the budget in terms of tax on interest income, it will be an incentive for depositors. Finally, the banking sector uses the accumulated deposits for capital formation in the country.