Third-party insurance a must for transporters: FM

Finance Minister P Chidambaram has said all insurance companies are obliged to provide third-party insurance cover to the transport sector.

The government had introduced a concept of "common pool" to cater to the losses of insurance companies due to heavy compensation they paid under the policy, he added.

Addressing different players of the transport sector, while launching a nationwide credit card facility for small road transport operators in New Delhi today, Chidambaram said, "There was much apprehension after the de-tariffing of the insurance sector over third-party insurance cover. Now the common pool will take care of the extra burden of the damage compensation insurance companies have to bear. For our economy, insurance and financial reforms are important, especially for the transport sector, which is the backbone of the Indian economy."

Chidambaram laid stress on electronic transfer of money in all transactions. He said the entire economy should move towards electronic commerce and transport sector, with huge monetary transactions.

The finance minister launched the Shriram-UTI Bank co-branded credit card allowing transporters to withdraw cash from ATMs for fuel, tyres, engine oil and other automotive requirements up to Rs 1 lakh and an additional accidental cover of Rs 3 lakh.