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| the leading private sector lender in the sub-continent nation.
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| Reacting to Reserve Bank of India rejecting the bid of Temasek Holdings and Government of Singapore Investment
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| Corporation to increase stake in ICICI Bank by 10% each, Finance Minister P Chidambaram said the Comprehensive
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| Economic Cooperation Agreement (CECA) signed by the two governments last year does not cover investment in banks.
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| Investments in banks are governed by guidelines and regulations issued by the Reserve Bank, which treats the two
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| investors as related entities, he told Bloomberg here. India is not "violating either the letter or spirit of CECA."
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| RBI, which limits the combined holding of an overseas investor and related entities in a private bank to 10%, last month
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| rejected Temasek and GIC's bid, which would have doubled their combined stake worth $1.2 billion.
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| Singapore and India in June 2005 signed the accord under which GIC, which manages the city's foreign reserves, and
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| Temasek, the state-owned fund, would be treated as separate, unrelated entities in terms of their investment
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| applications.
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| India has explained to Singapore its stand that the agreement did not apply to banks, Chidambaram said. "They have to
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| come back to us now," he said. "As CECA stands now, we are adhering to the letter and spirit. If CECA requires any
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| further amendment, we have to consider that separately."
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| As the agreement with Singapore stands now, the move to block the city-state's entities from raising their ICICI Bank
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| stake "won't be reconsidered," Chidambaram said. |
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