ICICI Bank has asked the government not to take into account overseas securities such as American Depositary Receipt (ADR) and Global Depositary Receipt (GDR) while deciding on a bank’s nationality.
Suggesting that the Department of Industrial Policy and Promotion (DIPP) should make a clarification on the issue of foreign holding in a bank, an issue on which ICICI Bank’s status depends, its Chief Executive Officer and Managing Director Chanda Kochhar said, “We are an Indian bank and we are proud of it.”
Earlier this year, DIPP issued new foreign investment guidelines, under which a company’s status would change from ‘resident’ to ‘non-resident’ Indian, if it has more than 50 per cent of indirect foreign investment, which would be a sum total of stake held through ADRs/GDRs, foreign direct investment (FDI), non-resident Indian (NRI) holding as well as foreign currency convertible bonds and shares.
ICICI Bank has a little over 51 per cent stake held by foreign institutional investors (FIIs), but it includes 29.07 per cent stake held through ADRs alone — thus changing its status to foreign bank as per the new guidelines.
“We have written to DIPP and have given our logic. It is important to clarify... We have not received a written response but they are clearly working on addressing our concerns,” Kochhar said.
