NEW DELHI: The People’s Bank of China (PBoC) has picked up a minor 0.006 per cent stake in ICICI Bank by investing Rs 15 crore in its recently concluded Rs 15,000 crore qualified institutional placement (QIP). Even as the investment made by PBoC is too small to worry about, it comes at a time when relationship between the two Asian nations have worsened since the Galwan valley border stand off. India has already made efforts to curb Chinese investment and takeover of domestic companies besides banning dozens of apps.
According to reports, the Chinese central bank was among the 357 institutional investors that subscribed to the issue. According to regulatory filings, the prominent investors in ICICI’s QIP are Government of Singapore, Morgan Investment and Societe Generale. Interestingly, this is not the first time when the Chinese bank’s investment in an Indian lender has raised eyebrows.
People’s Bank of China has got a lot of flak when it increased its stake in India’s largest mortgage lender HDFC to over 1 per cent when earlier in March this year. A few trade bodies had then alleged that the investment was a part of bigger design by China.
The central government, too, had then revised India’s Foreign Direct Investment (FDI) policy which said that investments from China will now require a clearance from the Centre. Later in June, it the Chinese bank reportedly sold its stake in HDFC.
“The investments made by People’s Bank of China in ICICI and HDFC is very negligible. It is a routine exercise by cash-rich financial entities to diversify their fund,” said a senior banking official requesting anonymity. Traders’ body Confederation of All India Traders (CAIT) strongly criticised the move stating that China has designed a well-planned strategy to make an intrusion into the Indian banking sector.
Meagre Amount
The investments made by People’s Bank of China in ICICI is very negligible and is seen as a routine exercise by cash-rich entities
Lobbys Worried
Strongly criticising ICICI Bank for allowing Chinese investment, CAIT said the Centre should devise a policy to protect banking sector