CAIT criticises ICICI, HDFC over PBOC investments

The Confederation of All India Traders (CAIT) on Tuesday requested finance minister Nirmala Sitharaman to direct ICICI Bank and mortgage lender HDFC to return investments made by People’s Bank of China. CAIT also criticised the private lender for allowing PBOC to invest in the bank despite anti-China sentiments prevailing in the country.

“It seems quite clear that China has designed a well planned strategy to make an intrusion into the Indian Banking sector which is quite well regulated and is very important for the financial health of the country,” said Praveen Khandelwal, Secretary General, CAIT. “Even though the Government had introduced a mechanism to check the foreign portfolio investments, there is nothing concrete yet from the RBI to restrain and control the funding coming in from China.”

People’s Bank of India is one out of the over 350 investors who participated in ICICI Bank’s Rs 15,000 crore QIP. The Chinese lender bought shares worth Rs 15 crores. It had recently purchased 0.2% in HDFC Ltd. taking its total stake in the mortgage lender to 1%.

Following escalating tensions on the Indo-Chinese border the government had brought new rules on foreign investments from neighbouring countries, which were implemented in April this year. As per the new rules prior government approval is required for investments from countries that share a land border with India. The change was mainly aimed at restricting investments from China.

In July, the government banned 59 Chinese mobile applications, including top social media platforms such as TikTok, WeChat and Helo, to counter the threat posed by these applications to the country’s “sovereignty and security”.