New Delhi, Aug. 17: The government is believed to have cleared ICICI Bank’s proposal to bring foreign equity in the holding company for its insurance venture.

Sources said the bank had secured the approval of the Foreign Investment Promotion Board (FIPB) to divest a 24 per cent stake in ICICI Financial Services to foreign investors. ICICI Financial Services is the holding company for ICICI Prudential Life Insurance and ICICI Lombard General Insurance.

Finance ministry officials, however, could not give an official confirmation of the development. When contacted, ICICI Bank also declined to comment. On June 22, the FIPB had turned down the bank’s proposal to divest a stake in ICICI Financial. It had rejected the proposal citing a clause in the insurance regulation that prevented a subsidiary company from being the promoter of an insurance business.

However, the bank feels as it remains the promoter of the business despite the transfer of shares from ICICI Bank to ICICI Financial Services, there is no violation.

ICICI Bank group head (strategy) and communication officer Kalpana Morparia had recently met department of economic affairs secretary D. Subbarao on the issue.

Firms such as Goldman Sachs, General Atlantic and Temasek are interested in a stake in ICICI Financial Services.

Last time, the bank had not submitted the papers relating to the approval given by the Insurance Regulatory and Development Authority. The FIPB reconsidered the proposal after ICICI Bank submitted the papers.