Mumbai: The Reserve Bank of India (RBI) on April 26 gave its nod to the merger of ICICI Ltd with ICICI Bank Ltd, paving the way for the merged entity to become the first universal bank in the country.

The approval was subject to compliance with the Cash Reserve Ratio and Statutory Liquidity Ratio requirements, prudential norms for portfolio of asset and liabilities and priority sector lending guidelines, RBI said in a release.

As the scheme of merger has been approved by the Bombay and Gujarat High Courts, the apex bank has no objection to the date of merger being the appointed date March 30, 2002 or any other date as per the orders of the High Courts.

Considering that advances of the ICICI Ltd were not subject to the priority sector lending norms for banks, ICICI Bank Ltd, after the merger, would have to maintain an additional 10 per cent exposure to this sector. This was over and above 40 per cent of net credit, the RBI said.

The condition of extra 10 per cent exposure to priority sector would apply until such a time as the aggregate priority sector advances reaches 40 per cent of the total net credit of the bank, it added.

The investments of ICICI Ltd acquired by way of project finance as on date of merger would be kept outside the exposure ceiling of five per cent of advances towards exposure to equity and equity linked instruments for five years to avoid any adverse effect on viability or expansion of the project.

PTI