After the Reserve Bank of India rejected Indiabulls-Lakshmi Vilas Bank merger plan, insurance regulator, IRDAI has also put the approval process for insurance arms of Indiabulls Integrated Services on hold.

Both life and general insurance arms of Indiabulls Integrated Services have received one out of three approvals required by any insurance company to commence business operations. Since then both insurance arms were in the process of filing papers to receive the second level approval or R2 from the insurance regulator.

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R1, R2 & R3 are the three approvals an insurance company requires before kick-starting business. R1 is an in-principle approval which basically means the company's business plans will be considered by the regulator for approval. R3 is the final step, which, once granted, allows the company to start operations.

Sources tell CNBC-TV18 the insurance regulator has turned cautious on the insurance plans of Indiabulls Integrated Services after charges of financial irregularities and fraud appeared against Indiabulls Housing Finance through a PIL filed against the company in Delhi High Court.

Delhi High Court has also ordered an investigation into the business operations of Indiabulls Group following the petition.

Sources add that IRDAI will be in a wait and watch mode to see what clarity emerges out the PIL as it gets heard going forward before processing the approvals for the insurance arms of Indiabulls Integrated Services.

IRDAI may also write to the company to seek clarification on the operations of Indiabulls Integrated Services and Indiabulls Group.

Indiabulls Integrated Services is not a subsidiary of Indiabulls Groups but has common promoters.

First Published:Oct 10, 2019 4:32 PM IST