Government Rules Out Merger of Public Sector Insurance Firms

The government announced on Monday that there are no plans to merge public sector general insurance companies. Minister of State for Finance Pankaj Chaudhary confirmed the infusion of Rs 17,450 crore from 2019 to 2022 into three PSU insurance companies to boost their growth. Previous merger plans were halted due to financial issues.

On Monday, the government confirmed there are no plans to merge public sector general insurance companies.

In a written response to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary revealed that Rs 17,450 crore had been infused between 2019 and 2022 into three PSU insurance firms—Oriental Insurance, National Insurance, and United India Insurance—to support their growth.

Chaudhary stated, 'There is no proposal under consideration of government at present for merger of public sector general insurance companies.' The 2018-19 Budget initially proposed a merger by then Finance Minister Arun Jaitley. However, the process could not be completed due to the companies' poor financial health.

Responding to another query about non-performing assets in the MSME sector, Chaudhary highlighted that Scheduled Commercial Banks had a total outstanding credit of Rs 28.04 lakh crore to the sector, with NPAs totaling Rs 1.25 lakh crore as of March 31, 2024. The gross NPA percentage for the MSME sector was 4.46 percent, compared to 2.74 percent for total loans and advances.