New Delhi: Since the Galwan Valley clash in Ladakh a few weeks back, India has been hitting back at China in an economic manner. The Indian Armed Forces lost 20 soldiers in the clash. As a counter to that move, India has banned a large number of Chinese apps from which the companies were earning substantial revenues. Also many Indian companies have called off projects in which there was Chinese involvement. However, it has been banning of the Chinese apps which has made a huge impact.
Amid all these developments, the Peoples Bank of China (PBOC) has acquired an equity stake in ICICI Bank. Earlier the Peoples Bank of China had made the disclosure of a holding in HDFC.
The government had in April notified new norms for FDI investments by neighbouring countries which would require approvals. It is not clear if portfolio investments need to go through some vetting process. There is no clear picture whether the government will continue with this open route till the time no FDI approval is required.
The investment by the Chinese central bank in ICICI Bank is modest. It subscribed to the recent ICICI Bank’s Rs 15,000 crore capital qualified institutional investors (QIP) placement and invested Rs 15 crore. However, this development is still a surprise to people associated with the banking industry.
The Chinese central bank was among the 357 institutional investors that subscribed to the issue.
The investment comes at a time when business and trade relations between India and China have nose-dived after the Galwan valley clash between the soldiers.
Earlier, a disclosure by HDFC had caused a flutter after PBOC holding breached one per cent mark. HDFC had clarified that Chinese central bank, People’s Bank of China (PBOC) has been an existing shareholder of the company and only the disclosure was being made as they hit the one per cent threshold. Since then there have been reports that PBOC has cut its stake in HDFC.