A day after ICICI Bank’s board approved increasing its stake in the insurance company, shares of ICICI Lombard General Insurance increased by almost 12% on Monday. By 10 am, ICICI Lombard stock was up 11.74 percent on the BSE, trading for Rs 1229. The shares of ICICI Bank were trading at Rs. 955 on the BSE, up 0.47 percent in the meantime.
In a filing with the exchanges, ICICI Bank stated that it would increase its stake in general insurance by 4% through various transactions. Before September 9, 2024, the private lender will purchase at least a 2.5% stake out of the 4%.
The private lender said in its regulatory filing that to ensure compliance with Section 19(2) of the Banking Regulation Act of 1949 and to make the Company a subsidiary of the Bank, subject to receipt of necessary regulatory approval(s), the Board of Directors approved an increase in shareholding in the Company, in multiple tranches up to 4.0% additional shareholding, as permitted under applicable law. Before September 9, 2024, the Bank would purchase at least a 2.5% stake of the above 4.0%.
ICICI Bank currently owns 48.02 percent of ICICI Lombard, its general insurance division. The Reserve Bank of India (RBI) has established guidelines that state that banks may own less than 30% or more than 50% of their general insurance arm, respectively. According to the Reserve Bank of India’s guidelines, banks may own less than 30% or more than 50% of insurance ventures. Additionally, ICICI Bank informed the exchanges that, subject to RBI approval, its board had approved the reappointment of Sandeep Batra as executive director for an additional two years, beginning on December 23, 2023, and ending on December 22, 2025. Furthermore, the bank mentioned that their board has re-appointed Hari Mundra, B Sriram and Madhavanan as Independent Directors for a second term by the ICICI Bank board.
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