Shares of ICICI Lombard rose more than 3% on Monday after the Reserve Bank of India (RBI) granted ICICI Bank a deadline of September 9, 2024, to dilute its stake in the general insurer below 30%.

As of December 2022, ICICI Bank holds a 48.02% stake in ICICI Lombard General Insurance. Section 19(2) of the Banking Supervision Act limits the bank’s shareholding to 30% of the company’s capital unless the company is a subsidiary of the bank.

In September 2020, ICICI Bank received a three-year waiver for holding over 30% of ICICI Lombard General Insurance Company and ICICI Prudential Life Insurance Company.

ICICI Lombard General Insurance Company and/or ICICI Prudential Life Insurance Company have indicated that obtaining the waiver during their operations may consider strategic options such as mergers and acquisitions or financing, which could potentially reduce the bank’s stake.

In September 2021, ICICI Lombard will cease to be a subsidiary of ICICI Bank after reducing its stake from 52% to 48%.

Shares of ICICI Lombard were up 1.5% at Rs 1,091.25 at 10:53 am, and shares of ICICI Bank were up 1.23% at Rs 853. The Nifty Bank index was flat at 40,486.00 points, while Nifty Financial Services rose 0.48% to 18,014.60 points.