The Reserve Bank of India (RBI) has allowed Temasek and Government of Singapore Investment Corporation (GIC) to acquire 10 pc equity each in ICICI Bank as a "one-off case."

The regulator has taken a stand that this cannot be "quoted as a precedence" for the Singapore government''s investment arms and any other foreign investor to pick up stakes in other private sector banks. The move assumes significance given ICICI Bank''s $5-billion equity offering in June.

Even though the government has been in favour of allowing the Singapore entities to hold higher stakes in ICICI Bank, RBI had earlier said that Temasek and other investors associated with the Singapore government, like GIC and Monetary Authority of Singapore, were all ''related entities'' and could together hold a maximum 10 pc stake.

The tussle between RBI and the Singapore government owes its origin to the Comprehensive Economic Co-operation Agreement between India and Singapore.

The agreement says "...for investments into India''s capital markets, India shall regard GIC, Temasek and their investment vehicles as independent and unrelated legal entities, for the purpose of application of the Sebi legislation, including rules, regulations and guidelines governing investment limits on Foreign Institutional Investors..."

Further, Annex 7 of the treaty says, "Each legal entity shall be allowed to purchase up to 10 per cent or the prevailing threshold under these regulations, whichever is higher, of the issued capital of any company."