ICICI awaits RBI norms on holding firms

ICICI Bank is still awaiting Reserve Bank of India’s final norms on bank holding companies, said Managing Director and Chief Executive Officer K V Kamath today.

“We are waiting for the discussion paper. We will wait,” Kamath said. On Friday, ICICI Bank scrapped the deals entered with investors who had intended to pick up stake in the bank’s proposed holding company, ICICI Financial Services.

Last date of the agreement with these investors had lapsed on Thursday as regulatory approval had still not come, the bank said. The bank was awaiting approvals from Reserve Bank of India, Insurance Regulatory and Development Authority, and Foreign Investment Promotion Board.

RBI had expressed its discomfort of banks setting up holding companies as these entities would be outside the central bank’s supervision limit.

In November, RBI had extended the date of releasing the draft norms on holding company, but did not set any final date for announcing the guidelines.

On whether valuation of the holding company has fallen due to delay in the approval from RBI, he said: “I don’t want to speculate. We are content with growing our business and we will remain content. We will see what happens.”

Kamath reiterated the country’s largest retail lender has still not decided on reducing lending rates on sectors like home and car loans. “This is the last quarter and normally there is a lot of credit off-take and demand.

So we will have to wait and watch. This is not the right time for me to talk on interest rates,” he said.

Kamath expects home loan demand to revive in the next financial year. “Demand will come back once you have price correction in property markets and affordability in terms of cost of homes and interest rates.”