The Reserve Bank of India (RBI) has given approval to the ICICI Bank for raising stake in one of its subsidiaries ICICI Lombard General Insurance Company Limited. The central bank of India has granted ICICI Bank to raise stake in ICICI Lombard by up to 4 per cent in various tranches. The private lender informed Indian stock market bourses about receiving the RBI’s approval for raising stake in its subsidiary. However, the approval is subject to certain regulatory approvals.
Details of RBI approval to ICICI Bank
Informing Indian bourses about the RBI approval, ICICI Bank said, “The Bank, in its disclosure filed with the stock exchanges on May 28, 2023, had communicated that its Board of Directors had approved an increase in the shareholding in ICICI Lombard General Insurance Company Limited (“Company”), in multiple tranches up to 4.0% additional shareholding, as permissible under applicable law, to ensure compliance with Section 19(2) of the Banking Regulation Act, 1949 and make the Company, a subsidiary of the Bank, subject to receipt of necessary regulatory approval(s).”
The ICICI Bank went on to add, “We wish to inform you that yesterday i.e. on August 4, 2023 in the afternoon the Bank has received the approval from Reserve Bank of India in connection with the above. Certain other statutory/regulatory approval(s) are awaited.”
ICICI Bank in its disclosure filed with the stock exchanges on March 10, 2023, had informed about an extension in timeline granted by the Reserve Bank of India for divesting the Bank’s shareholding in ICICI Lombard General Insurance Company Limited (‘the Company’) to less than 30% of the Company’s paid-up capital till September 9, 2024. As on March 31, 2023, the Bank holds 48.02% in the Company.
The Board of Directors approved an increase in shareholding in the Company, in multiple tranches up to 4.0% additional shareholding, as permissible under applicable law, to ensure compliance with the Section 19(2) of the Banking Regulation Act, 1949 and make the Company, a subsidiary of the Bank, subject to receipt of necessary regulatory approval(s). The Bank would acquire at least 2.5% stake out of the above 4.0% before September 9, 2024.