Government allows Singapore investment firms to hike stake in ICICI Bank

Mumbai: The government will allow Singapore government-owned Temasek and the government of Singapore Investment Corporation to double their stake in ICICI Bank.

The two have proposed to raise their combined stake in ICICI Bank to 20 per cent from the current 10 per cent. This has, however not been cleared by the Reserve Bank of India (RBI) as the two were treated as a single entity.

The clearance also follows Singapore government clearing proposals by the State Bank of India and ICICI Bank to start operations in that country.

Singapore investment companies are showing greater interest in the Indian financial sector as the Comprehensive Economic Cooperation Agreement between India and Singapore allows them a more liberalised investment regime.

Clarifying newspaper reports, commerce minister Kamal Nath said prime minister approved Manmohan Singh approved the plan after the Monetary Authority of Singapore offered to give State Bank of India (SBI) and ICICI Bank full banking licenses in Singapore

ICICI Bank, the country's second largest bank, meanwhile, had received RBI's approval for establishing new branches and additional off-site ATMs It, however, did not disclose the number of branches and ATMs it could open.

Banking sources said ICICI Bank had received permission to open branches in rural areas and off-site ATMs primarily in semi-urban centres.