Tag: NirmalaSitharaman

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Beyond

Mis-selling a crime under BNS, FM tells banks

Finance Minister Nirmala Sitharaman has warned banks and financial institutions that mis-selling financial products is now a punishable offence under the Bharatiya Nyaya Sanhita, and asked them to return their focus to core banking activities instead of aggressively cross-selling third-party offerings.

Speaking at a meeting with bank chiefs, Sitharaman said customers must not be forced or misled into buying insurance, mutual funds or other investment products that do not match their needs. She stressed that such practices erode public trust in the banking system and will invite legal consequences under the new criminal law framework.

The minister made it clear that banks exist primarily to mobilise deposits and provide credit, and that these fundamental functions should not take a back seat to fee-based income from distribution of financial products. She urged lenders to strengthen their due diligence and ensure that products are sold only after proper assessment of a customer’s risk profile and financial goals.

The government’s message comes amid rising complaints from customers who say they were pressured into purchasing policies or investment schemes while availing loans or opening accounts. Officials noted that mis-selling not only harms consumers but also exposes banks to reputational and regulatory risks.

Sitharaman also asked bank managements to improve internal training and accountability so that frontline staff do not prioritise sales targets over customer interest. Senior executives were told to closely monitor sales practices and put in place transparent grievance redressal mechanisms.

The finance minister further emphasised the need for responsible growth in the financial sector, calling on banks to support productive sectors of the economy, improve credit flow and maintain strong asset quality.

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Categories
Corporate

Government didn’t guide LIC’s Adani investments, says FM

Finance Minister Nirmala Sitharaman said the government did not issue any directions or advice to the Life Insurance Corporation of India (LIC) regarding its investments in the Adani Group. Responding to a question in the Lok Sabha, she emphasised that LIC’s decisions were made independently and in line with its standard operating procedures (SOPs).

Sitharaman said LIC has always made investment decisions based on company fundamentals, strict due diligence and regulatory norms. Over the years, the insurer has invested in several Adani Group companies after these checks. LIC currently holds shares worth ₹38,658.85 crore and debt worth ₹9,625.77 crore in various Adani firms.

She clarified that the Finance Ministry “does not issue any advisory or direction to LIC” on how it should invest its funds. Investment decisions, she said, are taken solely by LIC, governed by the Insurance Act, IRDAI rules, and regulations issued by SEBI and the RBI.

Her statement comes after a Washington Post report alleged that finance ministry officials pushed LIC to invest in the Adani Group earlier this year when the conglomerate was under global scrutiny. The report highlighted LIC’s ₹5,000-crore investment in secured non-convertible debentures of Adani Ports & SEZ in May 2025.

Sitharaman said the investment followed LIC’s due diligence process and board-approved policies. She added that LIC routinely invests in India’s largest companies. As of September 30, 2025, its investments in Nifty 50 firms amounted to ₹4.3 lakh crore, nearly 46% of its total equity portfolio.

The minister also detailed LIC’s internal oversight structure. Its investment operations are reviewed by concurrent auditors, statutory auditors, system auditors, internal vigilance teams, and are periodically inspected by IRDAI. “There is no direct oversight by the government on LIC’s investments,” she said.

Among private companies, LIC’s largest equity exposure is in Reliance Industries (₹40,901 crore), followed by Infosys, TCS, HDFC Bank, and Hindustan Unilever. Its biggest debt exposure is also with HDFC Bank (₹49,149 crore).

Within the Adani Group, LIC’s highest exposure is in Adani Total Gas (₹8,646 crore), ranking 25th among all its investments. Holdings in other Adani firms, including Adani Enterprises, Ambuja Cements, Adani Ports, Adani Energy Solutions, Adani Green Energy, and ACC fall further down the list.

Sitharaman also noted that LIC’s shareholdings of 1% or more in any listed company are already publicly available, as required under SEBI rules.

LIC, India’s largest institutional investor with assets of over ₹41 lakh crore, has repeatedly said its investments in the Adani Group were made independently, without any pressure from the Finance Ministry.

In an earlier statement, LIC said its decisions follow strict due diligence and comply fully with regulatory guidelines, adding that the Department of Financial Services “has no role” in its investment choices.

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Categories
Leaders

India Nears Top Three Globally, FM Sitharaman

India is steadily advancing toward becoming the third-largest economy in the world, Finance Minister Nirmala Sitharaman said, underlining the country’s impressive economic progress over the past decade.

Speaking at the Delhi School of Economics, she noted that India was the tenth-largest economy in 2014. Today, it ranks fifth globally, and with sustained growth, it is poised to move even higher, edging closer to joining the top three alongside the United States and China.

Sitharaman stressed that India’s growth is not just about numbers. An estimated 25 million people have been lifted out of multi-dimensional poverty in recent years, highlighting the social impact of economic development. Government reforms, infrastructure investments, and policies aimed at inclusive growth have all contributed to these achievements, she added.

The Finance Minister also pointed to significant improvements in India’s financial sector. Public sector banks are stronger today, with the long-standing twin balance sheet problem, which had strained both banks and corporate borrowers, largely resolved. This healthier banking environment is expected to boost investment, stimulate job creation, and support further economic expansion.

On fiscal management, Sitharaman noted that the government is on track to meet its fiscal deficit target of 4.4% of GDP (₹15.69 lakh crore) for FY 2025‑26, reflecting a commitment to balancing growth with fiscal responsibility. Analysts say that maintaining fiscal discipline while encouraging investment and consumption is critical to sustaining the momentum toward becoming a top-three economy.

India’s rise in global economic rankings carries broader implications. Achieving third-largest status would enhance the country’s international influence, increase foreign investment, and create more resources for sectors such as healthcare, education, and infrastructure.

Yet challenges remain: continued reforms, improved productivity, job creation, and careful navigation of global uncertainties, including inflation, commodity price volatility, and geopolitical risks, will be essential to secure this trajectory.

Sitharaman’s remarks underline that India’s growth strategy aims to combine economic scale with social progress, ensuring that prosperity reaches citizens across the country while strengthening the nation’s global standing.

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