People's Bank of China has now invested in NBFCs after HDFC and ICICI Bank

New Delhi, 21 September 2020 Monday

The state-owned People's Bank of China has now invested in Bajaj Finance after HDFC and ICICI Bank. Bank of China holds less than 1 per cent stake in Bajaj Finance.

It has not been disclosed on the stock exchange as the bank's holding is less than 1 per cent. Experts say the Chinese bank's investment in the three institutions is so low that it poses no risk.

This is the third investment in India by a state-owned bank in China. In early March this year, People's Bank increased its stake in HDFC Limited by 1 per cent. There was a lot of controversy and discussion about that.

Significantly, there are no restrictions on Chinese companies investing in India, but growing tensions between the two countries are raising questions about such investments. Following this, the government has tightened the rules for FDI and investment in foreign portfolios from neighboring countries.

Experts say the Chinese bank has a lot of funds and is diversifying its portfolio by investing in financial institutions in countries like India.

Bajaj Group Company

Bajaj Finance is one of the largest non-banking financial companies in India. This branch of Bajaj Financial Services is headed by Rahul Bajaj. Last month, People's Bank invested in the country's largest private sector ICICI bank. It is unknown at this time what he will do after leaving the post. Amid the Koro crisis, shares of Bajaj Finance fell from Rs 4,800 in March to Rs. 2,200 was gone.

In the banking sector, no single investor can take more than 15 per cent voting right in any bank and to get more than 5 per cent stake, permission of the Reserve Bank is required.