ICICI GETS A thumbs Up from IRDA for setting up holding company

The IRDA (Insurance Regulatory and Development Authority) has given its approval to ICICI Bank to establish ICICI Financial Services, subject to approval of RBI. The bank has decided to set up a holding company to transfer investments of asset Management Company.

The IRDA chairman, Mr. C.S. Rao has said that they had no issues with ICICI setting up its holding company. The proposal, which has received IRDA’s approval, will now be forwarded to the RBI. ICICI has already identified overseas investors for a 5.9% private placement valued at Rs 2,650 crore of the new NBFC.

The estimated value of ICICI Financial Services is Rs 44,460 crore. Over 70% of the value of ICICI Financial Services is expected to come on account of ICICI Prudential.

According to sources, ICICI Bank has set up the holding company to derive value of its subsidiaries in event of regulatory changes that could stop banks from entering into insurance business.