Kolkata-based non banking finance company (NBFC) Magma FinCorp attempt to get a licence to enter into the general insurance sector has hit the regulatory road block.
The insurance regulator Irda after finding some problems in the financial condition of the company has written to the Reserve Bank of India(RBI) for clarifications.
"Magma FinCorp is an NBFC regulated by RBI. We have written to RBI for some clarification on the financial condition of the company. We are awaiting for their reply,'' said top official of Irda.
However, V Lakshmi Narasimhan, CFO, Magma FinCorp, told FE, "We have already applied before Irda for our proposed foray into non-life insurance in partnership with HDI of Germany. We have already got approval for the same from RBI as early as in 2009." I don't know what was going on between the RBI and Irda on the topic, added Narasimhan.
Magma had formed a joint venture (JV) with HDI Gerling International Holding AG, Germany and had prepared plans to invest Rs 250 crore in the proposed JV . Magma Fincorp Limited and its promoters had signed a joint venture agreement with HDI-Gerling International Holding AG, Germany on July 28, 2009 to enter into the general insurance sector in India. HDI-Gerling International is part of the Talanx-Group, 3rd biggest insurance Group in Germany. The Joint Venture head-quartered at Kolkata will leverage on the strengths of the two companies to offer general insurance products through the existing strong distribution and service network of Magma with deep penetration in rural India.