11.12        ndian    onom
              states following its example. There are 18  detailed discussion on the banking sector refer the
              SFCs working presently.                     Chapter 12].
         (b) State Industrial Development Corporations
              (SIDCs): A fully dedicated state public     3. insurAnce inDustry
              sector FI to the cause of industrial        After Independence, for the purpose of expanding
              development in the concerned states.        the industry, one after another the life and non-
              First such FIs were set up (1960) in        life insurance businesses were nationalised by the
              Andhra Pradesh and Bihar.                   government (in 1956 and 1970, respectively),
          Almost all of the SFCs and SIDCs are at         and the public sector insurance companies did
     present running in huge losses. They may be re-      serve the better purpose in the areas of providing
     structured on the lines of the AIFIs, but there is   safety net and nation-building. In the wake of
     lack of will from the states and private financiers  the process of economic refroms a restructuring
     who are not interested to go in for their takeovers  of the sector was started and the industry was
     as such.                                             opened for entry of private players in 1999 and
                                                          an independent regulator was set up—the IRDA
     2. bAnking inDustry                                  (domestic and foreign—with an FDI cap of 49
                                                          per cent). Since then many private players have
     With the passage of time, the industry saw its
                                                          entered the industry. Presently, Indian insurance
     nationalisation (1969 and 1980) and again
                                                          industry consists of one public sector life insurer
     opening up for private sector entry (1993–94) to     (LIC) and four public sector general insurers;
     emerge as the most dependable segement of Indian     two specialised public sector insurers (AICIL and
     financial system—in a way its mainstay. Presently,   ECGC); one public sector re-insurer (GIC) and
     the industry consists of commercial banks both in    37 private insurance companies (in collaboration
     public and private sectors, Regional Rural Banks     with established foreign insurers from across
     (RRBs) and co-operative banks—a total of 171         the world).®22 The expansion and penetration
     Scheduled Commercial Banks (SCBs) out of             insurance in the country have increased during the
     whch 113 are in the public sector (19 nationalised   reform period, but not as per the expectations of
     banks, 7 banks in SBI group, one IDBI Bank Ltd.      the governments and the experts—several reasons
     and 86 RRBs); with the rest of the 58 banks owned    have been responsible for this (for a detailed
     by the private sector (domestic and foreign—FDI      discussion on the insurance industry refer Chapter
     in banks is allowed upto 26 per cent).21             13).
          In the wake of the economic reforms the
     government has promised speedier expansion of        4. security mArket
     the banking sector. But the entry of new private     After the government’s attempts to formally
     players in the banking sector has been slow,         organise the security and stock market of India, the
     hapmering the growth and expansion of the sector.    segment has seen accelerated expansion. Today, it
     But in a recent release the RBI has committed to     is counted among the most vibrant share markets
     allow new banks to come up on regular basis—         of the world and has challenged the monopoly of
     in April 2014 the RBI allowed two new private        banks in the capital market of the country.23 The
     sector banks to start their operations. [for a
                                                             22.   id, p.     .
       21.   u lications ivision, India 2014, (New Delhi:    23.  Ministry of Finance, Economic Survey 2012–13 (New
            Government of India, 2015), p. 326.                   Delhi: Government of India, 2013), p. 116.