Archive for October 5th, 2009

India Crossed the $100 Billion Mark in FDI :)

Amidst of the global crisis, India crossed the $100 billion milestone in foreign direct investment (FDI)

Amidst of the global crisis, India crossed the $100 billion milestone in foreign direct investment (FDI)

Amidst of the global crisis, India crossed the $100 billion milestone in foreign direct investment (FDI) through equity confirming its rising profile as a safe and sound investment objective.

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However, 44% of the money came through Mauritius as investors wanted to take advantage of India’s double taxation avoidance treaty with the island nation.

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Moreover, the cumulative FDI inflows since 2000 and up to July 2009 amounted to $100.33 billion while the inflows in the first 4 months of the current fiscal were $10.49 billion and the other big investors included Singapore, the US, UK and the Netherlands.

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Additionally, it is said that FDI’s main impact comes from new technology, new managerial capabilities and new benchmarks in corporate functioning whereas India reached the $100 billion mark at a time when the global financial crisis has had a dampening impact on FDI flows which are expected to fall this year.

Further, it is said that the global FDI flows will decline by 30% in 2009 reviving only marginally during the next year.

Although declining, FDI flows to developing countries proved to be more flexible than other capital flows such as portfolio investment and bank lending, the main reasons being that FDI is more of a long term nature than capital flows.

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On the other hand, India’s services sector received 23% of the cumulative equity FDI inflows followed by computer software, hardware, telecommunication and real estate.

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IRDA Shot-Downs FINWEB Proposal :)

Irda has rejected FINWEB's proposal :)

Irda has rejected FINWEB's proposal πŸ™‚

IRDA, the insurance regulator has rejected a proposal to register all financial advisors with the Financial Well-Being Board of India (FINWEB).

FINWEB is an agency to write rules on the common minimum standards for over 3 million sellers of insurance, pension and mutual fund products.

The proposal was aimed to protect interests of 188 million investors in the country.

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In addition, it features in a consultation paper of a panel set up by the High Level Committee on Financial Matters (HLCCFM), an apex forum for financial sector regulators.

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The IRDA has powers at present to license insurance agents and brokers.

The proposal is being interpreted as a back-door entry for FINWEB to take over this function.

Besides, FINWEB will also have a self-regulatory arm to bring all financial advisors under one common standard going by the consultation paper on β€˜minimum common standards for financial intermediaries and financial education’.

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But the IRDA has opposed any new arrangement to create a new architecture for financial sector advisors.

IRDA Chairman was quoted as β€œThe mandate of the insurance regulator is to find the fine balance between the duty to regulate, promote and ensure the orderly growth of the insurance business, re-insurance business and protect the interests of policy-holders.
The insurance regulations have achieved this balance”.

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