Decision over ICICI to be reconsidered-FIPB

The Foreign Investment Promotion Board is looking forward to reconsider the proposal of ICICI Bank to divest its 24 per cent stake in ICICI Financial Services, the bank's holding company for insurance business in its next meeting scheduled for July 13.

There is some speculation over the issue that FIPB might approach the Banking Division and insurance regulator IRDA.

The bank’s proposal had initially been rejected on the ground that 2(g) (i) of IRDA regulation does not allow a subsidiary company to be a promoter of the insurance business.

ICICI Bank has however decided that it would continue to be the promoter of its insurance businesses, ICICI Prudential Life Insurance and ICICI Lombard General Insurance despite transfer of shares from ICICI Bank to ICICI Financial Services. This piece of news was put forth by ICICI Bank Group Head Strategy and Communication Officer Kalpana Morparia, yesterday in a meeting with Department of Economic Affairs Secretary D Subbarao.

A ministry official has commented that the Board is gearing up to reconsider its decision. The issue might be taken up on July 13.