The government will act swiftly in the ICICI Bank-Videocon loan case if reports of investigative agencies indict the bank’s management and it is waiting for the probe reports to have a clearer view, a senior official said.
The government will act swiftly in the ICICI Bank-Videocon loan case if reports of investigative agencies indict the bank’s management and it is waiting for the probe reports to have a clearer view, a senior official said on Tuesday.
The government nominee on the ICICI Bank board — who hasn’t been attending the board meetings after the controversy flared up in late March — will mark his presence once investigators give a clean chit to the board, said the official.
Lok Ranjan, a joint secretary in the department of financial services, last month replaced Amit Agrawal as the government’s nominee director on the bank’s board.
ICICI Bank on Monday announced its results for the fourth quarter of 2017-18.
The bank saw its consolidated net profits declining by 45% from a year before on a rise in bad loans. “The finance ministry hasn’t yet offered any view on the loan case, as it is waiting for the investigations to be over,” the official said. The Reserve Bank of India (RBI) as the banking regulator already has adequate power to act in this case as well, he added.
ICICI Bank chief executive Chanda Kochhar and her husband Deepak Kochhar are in the midst of the controversy on the issue of a Rs 3,250-crore loan to the Videocon Group in 2012. The deal recently made news after reports questioned the loan and linked it to a possible quid pro quo that Videocon promoter Venugopal Dhoot allegedly had with NuPower Renewables, a company founded by Deepak Kochchar. The Central Bureau of Investigation (CBI) and the income tax department are investigating the allegations.
The ICICI Bank board, however, has stood by Chanda Kochhar. It has said the loan was granted by a consortium of banks, and ICICI Bank’s share was less than 10%. The lending decision was taken by a committee, which also included independent members.
On Monday, Kochhar said the board had “made its stance very clear” on the conflict of interest in the Videocon loan issue and that she did “not have anything more to add”.
ICICI Bank’s consolidated net profit crashed 45% to Rs 1,142 crore in the March quarter. On standalone basis, the bank’s net profit crashed 50% to Rs 1,020 crore in the last quarter, as bad loans weighed. Gross non-performing assets (NPAs) jumped to 8.84% of gross advances at the end of March, against 7.89% a year earlier. The bank said advances worth Rs 15,737 crore turned bad in the March quarter, of which, about Rs 9,900 crore was on account of RBI’s new framework for stressed assets.
Interestingly, ICICI Bank’s shares jumped an impressive 6.9% on the BSE on Tuesday, when the Sensex remained flat, with some analysts saying the bank’s balance sheet clean-up exercise is a positive step.