ICICI Bank has been provided with an exemption from provisions of the Banking Regulation Act regarding shareholding more than 30 per cent among two insurance subsidiaries.
The three-year exemption said that based on ICICI Lombard General Insurance Company Ltd’s initial announcement, the proposition is the acquiring of another general insurance business which if consummated will result in a reduction in ICICI Bank’s shareholding to less than 50 per cent.
The previous month, ICICI Lombard had announced the merger of Bharti Axa’s non-life insurance business with itself.
Sub-section (2) of Section 19 of the Banking Regulation Act 1949 provides that no banking company will hold more than 30 per cent shares in any company.
“The exemption during its operation may permit both ICICI Lombard General Insurance and ICICI Prudential Life Insurance to consider strategic options such as mergers and acquisitions or capital raise, which have the potential of reducing the bank’s shareholding,” said ICICI Bank.
Further details were no current plans for the bank to divest
less than 50 shareholdings in ICICI Prudential Life Insurance. There will be no impact on the current distribution arrangements, it added.