Companies

ICICI Bank to be treated as foreign company for computing FDI

Seeking to put the record straight, the Union Commerce and Industry Ministry on Thursday said that ICICI Bank and other lenders whose more than 50 per cent equity is owned by overseas entities would be treated as ‘foreign companies' for the purpose of computing FDI (foreign direct investment).

“ICICI is an Indian bank, but it is over 50 per cent equity foreign owned, it is owned by foreigners in that sense for downstream investment it is a foreign company,” Department of Industrial Policy and Promotion (DIPP) Secretary R. P. Singh told reporters here.

Besides ICICI Bank, the other lenders which have more than 50 per cent foreign equity holding are: HDFC Bank, Yes Bank, IndusInd Bank, Federal Bank, ING Vysya and Development Credit Bank. As these banks are classified as foreign entities, they will have to follow FDI guidelines before making investments in any sector. “If ICICI makes any downstream investment, that will be considered as FDI,” he added.

Mr. Singh said ICICI Bank has the same footing like any other bank as they are a company incorporated in India.

He said the Industry Ministry permited up to 74 per cent equity in a bank to be owned by outsiders and ICICI had the right to have equity up to 74 per cent that does not really affect its functioning as a bank. “The obligations which they have to take as a bank, they have taken those obligations. For downstream investment, we wanted to be sure that the parent company is controlled and owned by Indians,” Mr. Singh added.

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Printable version | Mar 6, 2021 4:32:37 AM | https://www.thehindu.com/business/companies/ICICI-Bank-to-be-treated-as-foreign-company-for-computing-FDI/article14968653.ece

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