ICICI Bank Gets RBI Approval to Increase Shareholding in Eight Indian Banks
ICICI Bank, one of the leading private sector banks in India, has received authorisation from the Reserve Bank of India (RBI) to increase its collective shareholding up to 9.95% in eight Indian banks, as reported by Retail Banker International.
Details of the Stake Acquisition
The stake purchase will be executed through ICICI Bank’s asset management arm, ICICI Prudential Asset Management, along with other group entities. This move signifies ICICI Bank’s strategic intent to strengthen its foothold in the Indian banking sector.
Banking entities covered under this approval include Bandhan Bank, City Union Bank, Equitas Small Finance Bank, Federal Bank, IDFC First Bank, HDFC Bank, Karur Vysya Bank, and RBL Bank.
RBI’s Conditions for the Stake Acquisition
The RBI has stipulated that the stake acquisition must be completed within a year from the date of the regulator’s communication. If not finalised within this period, the approval will no longer be valid. This condition ensures that the process is carried out in a timely manner, maintaining the stability and integrity of the banking sector.
The regulatory clearance is given under the consolidated Master Direction governing acquisition and holding of shares or voting rights in banking companies. This is in line with the RBI’s objective to ensure transparency and adherence to regulations in such transactions.
Role of ICICI Prudential AMC
ICICI Prudential AMC will make these investments as an investment manager on behalf of its mutual fund schemes including those under Specialised Investment Fund strategies as well as Alternative Investment Funds and clients of its Portfolio Management Services. This diversifies and enriches the investment portfolio of ICICI Prudential AMC, thereby potentially offering better returns to its investors.
In the past, ICICI Bank faced a fine of Rs7.5m ($85,479) by the RBI for lapses related to property valuation rules and norms for opening current accounts. With this new strategic move, ICICI Bank continues to strengthen its position in the Indian banking sector, while adhering to the regulatory requirements.
Conclusion
This important development in India’s banking sector highlights ICICI Bank’s strategic growth plans. With the backing of RBI, ICICI Bank is set to expand its shareholding, thereby strengthening its foothold in the Indian banking industry.
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Source: Retail Banker International
