ICICI Bank will transfer its holdings in its insurance and asset management businesses to a new holding company called ICICI Holdings. The bank would transfer to ICICI Holdings its 74% equity holdings in ICICI Prudential Life Insurance Company and ICICI Lombard General Insurance Company and 51% in Prudential ICICI Asset Management Company and Prudential ICICI Trust to the new entity.
The book value of ICICI Bank's investment in ICICI Prudential Life is Rs. 1300 crores, ICICI Lombard General Insurance Rs. 600 crores and in ICICI Prudential Asset Management Company and the trustee company is about Rs 50 crores.
The decision to move these assets to the new company was prompted by the Reserve Bank of India (RBI) regulation that banks can invest a maximum of 20% of their net worth in subsidiary companies.
The bank has applied for approvals from the RBI and the Insurance Regulatory and Development Authority (IRDA) for transferring its stake in the insurance and mutual fund ventures.
ICICI Holdings may consider a public listing of its equity shares at an appropriate time to meet a part of the further capital requirements of ICICI Life and ICICI General. ICICI Bank intends to retain majority ownership in ICICI Holdings.
Read the Business Standard and The Economic Times articles.
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