The Hindu Business Line : Guidelines on intermediate holding cos still awaited

In an earlier discussion paper, the RBI had expressed concern about intermediate holding companies, which could have multiple layers. The central bank was in favour of a structure where the holding company is at the peak and the bank, insurance and asset management companies are its subsidiaries. A senior bank official said if RBI insists on having the holding company staying at the apex, then it may be a ‘non-starter’. “An amendment to the Banking regulation Act would be required for a holding company to own a bank. An amendment to the Act may take a long time,” said the official.

ICICI Bank had in fact already received commitments to issue 5.9 per cent stake in its proposed subsidiary, ICICI Holdings, for Rs 2,650 crore to private investors. These commitments will expire after November and would require to be renewed.

Sources said the bank may have to examine alternatives such as the individual listing of its insurance companies to raise capital.

More Stories on : Financial Policy | RBI & Other Central Banks | ICICI Bank Ltd

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K.V. Kamath is Forbes Asia Businessman of the year