People’s Bank of China holding a share in ICICI

Chinese Central Bank, People’s Bank of China has acquired a very small stake of 15 Crore in ICICI bank by QIP ( Qualified Institutional Placement) out of 15000 Crore issued which is exactly 0.0065% at current market capitalization.

People’s Bank of China has also invested in various Bluechip Indian Companies including the Country’s largest mortgage firm, HDFC Ltd where currently its stake is over 1% by the end of March 2020, which was reduced due to increasing tensions between the nations in April-June Quarter.

During the QIP of ICICI, Singapore government held 11.6% of total offer size and other investors like Morgan Stanley Investment Funds Global Opportunity Fund and Societe General- ODI held 7.31% and 5.55%, respectively.

The objective of the QIP was to strengthen the capital adequacy ratio of the bank. Proceeds would improve the bank’s competitiveness and aid general corporate requirements and for all other purposes which are permitted under the laws in force.

ICICI Bank faced pessimistic criticism from Confederation of All India Traders(CAIT).

CAIT strongly criticized the Bank for accepting the investment from Chinese bank because of the sentiments held by our nation towards China. As per CAIT, China is trying to make inroads into the Indian Financial System as it has invested in HDFC Ltd. earlier this year.

They are suggesting Nirmala Sitharaman, Finance Minister to obligate both the banks I.e. ICICI and HDFC Ltd. to return the investment to the Chinese bank. Also. It has urged the Ministry of Finance to take immediate cognizance of this entire scenario and design a policy framework to thwart Chinese strategies and protect the sovereignty of the Banking System.  

This organization also advised and compelled the Reserve Bank of India to do the needful, making it realize its responsibilities towards the Banking sector of the country.