ICICI Financial institution on Monday stated it’s got exemption from paring stake in its life and non-life subsidiaries to 30 per cent for a interval of three years.
A authorities notification exempted ICICI Financial institution from the provisions of Part 19(2) of the Banking Regulation Act, 1949 with respect to shareholding above 30 per cent in ICICI Lombard Basic Insurance coverage Firm and ICICI Prudential Life Insurance coverage Firm Restricted, for a interval of three years, the financial institution stated in a regulatory submitting.
The central authorities, on the advice of the Reserve Financial institution of India, issued the notification on September 9, 2020, it added.
Sub-section (2) of Part 19 of the Banking Regulation Act, 1949 gives that no banking firm shall maintain shares in any firm, whether or not as pledgee, mortgagee or absolute proprietor, of any quantity exceeding 30 per cent of the paid-up share capital of that firm or 30 per cent of its personal paid-up share capital and reserves.
“As beforehand introduced by ICICI Lombard Basic Insurance coverage Firm, it has proposed an acquisition of one other common insurance coverage enterprise (Bharti AXA Basic), which if consummated would lead to ICICI Financial institution’s shareholding in ICICI Lombard Basic Insurance coverage Firm Restricted lowering to lower than 50 per cent,” it stated.
The above exemption would facilitate compliance with the Banking Regulation Act, it stated.
The exemption throughout its operation could allow each ICICI Lombard Basic Insurance coverage Firm and/or ICICI Prudential Life Insurance coverage Firm to contemplate strategic choices corresponding to mergers and acquisitions or capital increase which have the potential of lowering the financial institution’s shareholding.
“There are not any present plans for the financial institution to divest to lower than 50 per cent shareholding in ICICI Prudential Life Insurance coverage Firm Restricted. There could be no influence on the present distribution preparations,” it added.
The above is unrelated to the financial institution’s present evaluation of its monetary place and outlook, it stated.
ICICI Financial institution has said previously that based mostly on its capital place, working earnings and provisions already made, it expects to be properly positioned to soak up the stress arising out of the COVID-19 pandemic, it added.
Subsequently, the financial institution has additional strengthened its stability sheet by elevating Rs 15,000 crore of extra fairness capital in August 2020, it stated.(Solely the headline and movie of this report could have been reworked by the Enterprise Customary employees; the remainder of the content material is auto-generated from a syndicated feed.)