Billionaire Mukesh Ambani’s Reliance Industries Ltd (RIL) is set to take another big step after announcing the demerger of its financial services arm. The company is preparing to enter the insurance business. According to a Business Line report, RIL is in the final stages of applying for the insurance regulator for life and general business. Reliance will form two separate companies for the business and issue licenses separately.
“Although the process of demerging the financial services business has not yet officially begun, the plan is to have all licenses ready so that the company is ready to operate from day 1,” the statement said. to develop.
The insurance companies will contribute a capital base of Rs 1,000 crore each. According to the Insurance Regulatory and Development Authority, the minimum paid-up capital for life and general insurance business is ₹100 crore each.
“IRDAI wants existing life and general insurance companies not to be considered a licensing target. Thus, during mergers and acquisitions, preference will be given to those already licensed to carry on the business,” the source added.
RIL announced on October 21 that its financial arm will be demerged as Jio Financial Services Ltd (JFSL). RIL shareholders will receive a share for every share they currently hold in the company, the firm said in a statement.
“Reliance Strategic Investments Limited (RSIL) and their respective shareholders and creditors, RIL will demerge its financial services into RSIL (renamed Jio Financial Services Limited or JFSL),” the statement said.
Reliance Strategic Investments Limited is currently a 100 percent subsidiary of RIL and a systemically important non-banking financial company registered by the RBI.
RIL’s investment in Reliance Industrial Investments and Holdings Limited (RIIHL) was transferred to JFSL.
Jio Financial Services Ltd will have liquid assets to provide adequate regulatory capital for lending to consumers and merchants and will also develop other financial services verticals such as insurance, digital brokerage, payments and asset management over the next 3 years of business operations.