NEW DELHI: The Foreign Investment Promotion Board will reconsider a proposal by ICICI Bank to disinvest 24 per cent stake in ICICI Financial Services. The board will also take up Standard Chartered Bank''s proposal to take 49 per cent stake in UTI Securities from Securities Trading Corporation of India (STCI). ICICI Bank will present papers of approval given by insurance regulator IRDA to its proposal. FIPB had earlier refused the bank''s proposal on the ground that Section 2(g)(i) of IRDA regulations does not allow a subsidiary company to be a promoter of insurance business. However, ICICI Bank is of the view it would continue to be the promoter of its insurance businesses, ICICI Prudential Life Insurance and ICICI Lombard General Insurance, despite transfer of shares from ICICI Bank to ICICI Financial Services and as such this does not flout any regulations.
While IRDA has given its clearance over the issue that transfer of shares to ICICI Financial services, which has got commitments from foreign investors, would not breach the 26 per cent FDI cap, it had not taken up the issue of promoter company for insurance businesses. Stanchart Bank''s proposal to purchase 49 per cent stake in UTI Securities from STCI would also come up at the FIPB meeting. In February 2006, STCI had purchased 100 per cent stake in UTI Securities for Rs 265 crore from the Specified Undertaking of UTI. UTI Securities offers institutional, retail and online broking services.
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