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ICICI Bank to divest stake in two banks

By Our Special Correspondent

MUMBAI, SEPT. 20. ICICI Bank, the country's largest private sector bank, would dilute its stakes in Federal Bank and the South Indian Bank in the next three years.

ICICI Bank at present holds 20 per cent stake in Federal Bank and over 10 per cent stake in South Indian Bank.

"We have written to the Reserve Bank of India about our intention to dilute our stake in Federal Bank and South Indian Bank in the next three years", said K. V. Kamath, Managing Director of ICICI Bank, on the sidelines of a press conference to commemorate the milestone of one million policies ICICI Prudential Life Insurance.

The stakes in both banks would be offloaded through secondary market operations. This follows the RBI guideline, which stipulates that the cross holding of one private bank in another private bank cannot be more than 5 per cent.

Instead of taking the route of acquisitions or consolidation, the bank plans to grow organically by expanding its operations in India and abroad. The bank has already applied for opening new offices in Russia and New York. The foreign operations of the bank are expected to contribute 20-22 per cent to its income in the next three years.

Further, ICICI Bank is not seeing any hardening of interest rates in the near future. According to Mr. Kamath the current situation does not warrant any change in interest rates for the bank. He said while the demand for credit from industry was strong, that from retail sector was growing faster. The retail sector now has a 56 per cent share in ICICI Bank's portfolio.

ICICI Prudential's feat

ICICI Prudential Life Insurance Company has become the first private life insurer to cross the milestone of 10 lakh policies.

The sum assured stood at about Rs. 22,500 crores and new business premium income was Rs. 1,700 crores, said Shikha Sharma, Managing Director and CEO of Prudential Life Insurance, while addressing a press conference here today. At present, the capital base of the company is Rs. 675 crores and according to Ms. Sharma the joint venture partners would infuse additional capital in the current financial year.

To commemorate the one million-policy milestone, ICICI Prudential Life launched Dil Se, an initiative to secure the future of underprivileged children. The company would altogether gift 50 such policies, totalling Rs. 10 lakhs to the underprivileged children in Mumbai, Delhi, Kolkata, Chennai andS Bangalore.

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