Amid the ‘Boycott China’ outrage, the Chinese central bank finance the ICICI Bank

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With the ongoing angst in Indians, which birthed to a trend of ‘Boycott China’. Recently there have been news surfacing that The People’s Bank of China has injected an enormous amount in ICICI Bank. It emerged as leading investors in the Rs. 15,000 crore capital for ICICI Bank that ended in the August’s second week in 2020. Chinese central bank signed a cheque of Rs. 15 crores under the institution’s qualified placements.

The central bank or the People’s Bank of China was among the 357 investors for institutions that included global institutions, insurance companies, and domestic mutual funds, all subscribing to the issue. The prominent investors included were Morgan Investment, Societe Generale, and Singapore Government.

After the central bank’s investment in HDFC Ltd., a mortgage lender, raising its stake in HDFC to about 1%, there was a flutter in the Indian market during March 2020. Now the bank invested in ICICI Bank. And according to the experts, this new investment by the Chinese Bank is prone to any threat as a banking business is a regulated one.

As the banks like the Chinese central bank are flooded with enormous funds, they can spread their investments to the developing nations like India, rather than being involved with only the developed ones like Europe and the US. China is already in a trade war with the USA; the war has reached the business sectors of the two nations already.

The Indian Government, however, tightened the portfolio of the international investment rules, especially on the ones that come from the neighboring nations like China, that are looking for the opportunities to take over the markets.

There have been some revelations that the investment amount of Chinese bank on the HDFC, a mortgage lender, has reduced in the last three months, and their stake is even below 1% in HDFC Ltd, as there is no show for them in the June’s category of 1 percent stakes. Initially, too, their investment and stake on HDFC were too less to cause any threat to such an entity regulated by RBI.

Even though there is no bar on the China-based investments for India, but with the Galwan clash, the relations between the two are exceptionally on a downhill. The Galwan Valley clash caused a severe loss of lives to India with the death of several national Soldiers, and the relations are tensed since then. There is a wave of massive anger among the citizens with the Chinese, and they started ‘Boycott China‘ movements, after which this is the first investment received from them.

Previously, India banned 59 Chinese apps, including the topmost popular ones like ShareIt and TikTok, and now also many of the Chinese apps are marked to be banned soon. 

The government of India is closely monitoring their Chinese investments.

 

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