The PM Narendra Modi government, expecting re-election, has outlined an ambitious legislative agenda for its initial 100 days in office. Among the key proposals is the establishment of a National Financial Information Registry (NFIR) through a proposed bill set for introduction in Parliament. The NFIR aims to furnish lending institutions with comprehensive data to expedite credit processes and reduce costs.
PM Modi has instructed ministers to collaborate with secretaries and officials to develop the agenda for the government’s first 100 days.
Under the NFIR framework, banks may seek consent from individuals or enterprises to access information regarding their business metrics, such as turnover, electricity consumption, and GST payments. Failure to provide consent may result in banks demanding collateral or offering loans at higher interest rates, according to reports.
To bolster microinsurance, crucial for financial inclusion, the government aims to lower the minimum capital requirement for such players below the current mandate of Rs 100 crore. Amendments to the Insurance Act and the IRDAI Act are near completion following consultations with stakeholders.
IBC boost
Furthermore, the government intends to refine insolvency laws by introducing amendments to the Insolvency and Bankruptcy Code (IBC). These amendments will introduce norms for cross-border and group insolvency, eliminate interim moratoriums for personal guarantor assets, and introduce project insolvency under a real estate and creditor-led resolution plan (CLRP).
Additionally, significant reforms are anticipated in the insurance sector, including the introduction of composite insurance licenses, differential minimum capital requirements, and facilitation of captive insurance.
Presently, the Insurance Act of 1938 and regulations by the Insurance Regulatory and Development Authority of India (IRDAI) prohibit insurers from providing life, general, and health insurance under a single entity. Permitting composite licensing could streamline operations for insurers, reduce costs, and enhance customer options.
