Private sector lender ICICI Bank has been exempted from provisions of the Banking Regulation Act relating to shareholding above 30 per cent in its two insurance subsidiaries.
The exemption is for three years. "As previously announced by ICICI Lombard General Insurance Company Ltd, it has proposed an acquisition of another general insurance business which if consummated will result in ICICI Bank's shareholding reducing to less than 50 per cent," it said.
Last month, ICICI Lombard had announced the merger of Bharti Axa's non-life insurance business with itself.
Sub-section (2) of Section 19 of the Banking Regulation Act 1949 provides that no banking company will hold more than 30 per cent shares in any company. The exemption to ICICI bank will facilitate compliance with the Banking Regulation Act.
"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.
It said there are no current plans for the bank to divest to less than 50 shareholdings in ICICI Prudential Life Insurance. There will be no impact on the current distribution arrangements, it added.
( With inputs from ANI )
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