Current Affairs - Finance

The Insurance Amendment Bill, 2025 introduces a major reform by increasing the permissible FDI limit in insurance companies to 100%. This change reflects the government’s intention to open the sector fully to foreign investment, which is expected to bring in substantial capital inflows. Higher foreign participation can enhance competition, encourage innovation, and improve the quality and reach of insurance services in India. The reform aligns with the regulatory framework governed by the Insurance Act, LIC Act, and IRDAI Act, strengthening the sector’s growth potential.

The Sixteenth Finance Commission’s report covers the five-year award period from 2026 to 2031, guiding India’s fiscal framework for this duration. During this period, the Commission’s recommendations shape how tax revenue is shared between the Union and the States, how grants-in-aid are allocated, and how disaster risk financing mechanisms are structured. It plays a central role in strengthening fiscal federalism by defining criteria for vertical and horizontal devolution, local body financing, and performance-based grants. The report, prepared after extensive consultations and expert inputs, forms the foundation for fiscal planning and resource distribution for the entire award cycle.

The Investor Education and Protection Fund Authority (IEPFA), under the Ministry of Corporate Affairs, organized a financial awareness drive aimed at empowering rural women. Conducted in Karnal, Haryana, under the theme “Viksit Bharat ke path par Saksham Naari,” the initiative focused on enhancing financial literacy, promoting safe investment practices, and fostering digital inclusion among women Self-Help Groups. Partnering with SEBI, AMFI, NCAER, and HSRLM, the program sought to strengthen financial independence and informed decision-making among rural women, contributing to inclusive economic growth and women’s empowerment in India.

State Bank of India (SBI) has approved the divestment of a 6.3% stake, equivalent to 3.2 crore shares, in its subsidiary SBI Funds Management Ltd (SBIFML) via an Initial Public Offering (IPO). Additionally, its co-promoter, Amundi India Holding, will sell 3.7%, making the total IPO size 10% of equity. This move aims to unlock value and prepare SBIFML for its public listing in 2026, marking it as SBI’s third listed subsidiary after SBI Cards and SBI Life Insurance.

The Securities and Exchange Board of India (SEBI) has proposed an overhaul of the mutual fund fee framework to promote transparency, fairness, and investor protection. The consultation paper suggests that taxes and government levies such as STT, GST, and stamp duty be excluded from the Total Expense Ratio (TER) and charged separately to investors. It also proposes removing the additional 5 basis points expense for Asset Management Companies (AMCs) on Assets Under Management (AUM). These reforms aim to simplify cost structures, improve investor clarity, and ensure better governance in India’s mutual fund industry.