Temasek, GIC to get nod for ICICI Bank stake

Temasek Holdings Pte and Government of Singapore Investment Corporation (GIC) are expected to get approval by June to own 10% stake each in ICICI Bank, India's largest private bank.

The Reserve Bank of India (RBI), which had initially raised objections on the two entities buying 20% stake on grounds that under present rules no foreign entity is allowed to own more than 10% stake in a local bank, is likely to make the required changes in regulations, official sources said.

RBI had previously deemed Temasek and GIC as a single entity because both are owned by Singapore government, the sources said.

However, after Prime Minister Manmohan Singh's nod to the plan following the India-Singapore Comprehensive Economic Cooperation Agreement (CECA), RBI is likely to review its decision.

As part of the CECA, the State Bank of India is also expected to get a banking license to operate in Singapore.

As on June 30, 2006, foreign institutional investors had 45.44% stake in ICICI Bank, followed by insurance companies (12.6%), individual stakeholders (5.77%), corporate bodies (4.70%) and mutual funds (3.16%).