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ICICI Bank, on Monday, said it has been exempted from provisions of the Banking Regulation Act relating to
shareholding above 30 per cent in its two insurance subsidiaries. “As previously announced by ICICI Lombard General Insurance Company Limited, it has proposed an acquisition of another general insurance business, which if consummated, would result in ICICI Bank’s shareholding in ICICI Lombard General Insurance Company Limited reducing to less than 50 per cent,” it said in a regulatory filing, adding that the exemption would facilitate compliance with the Banking Regulation Act.
“The Central Government on the recommendation of the Reserve Bank of India ...exempted ICICI Bank from the provisions of Section 19(2) of the Banking Regulation Act, 1949 ...,” It further said.
Sub-section (2) of the Section 19 of the Banking Regulation Act 1949 provides that no banking company shall hold more than 30 per cent shares in any company.
Last month, ICICI Lombard had announced the merger of Bharti Axa’s non life insurance business with itself, subject to regulatory approvals.
“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, adding that there are no current plans for the bank to divest to less than 50 shareholding in ICICI Prudential Life Insurance.
There would be no impact on the current distribution arrangements, it further said.