Shares of India's third-largest bank ICICI Bank dropped 7% on Monday, presumably as a fallout to the CBI launching a preliminary enquiry in a matter relating to a loan given to Videocon Group, and RBI slapping a fine of nearly Rs 59 crore on account of non-compliance.
Shares of India’s third-largest bank ICICI Bank dropped 7% on Monday, presumably as a fallout to the CBI launching a preliminary enquiry in a matter relating to a loan given to Videocon Group, and RBI slapping a fine of nearly Rs 59 crore on account of non-compliance.
Shares of ICICI Bank were the biggest losers among the blue-chip constituents of Sensex and Nifty on Monday. The stock of ICICI Bank plunged as much as 7.02% to a five-month low of Rs 258.8 on National Stock Exchange on Monday. A massive trading has been observed in the shares of ICICI Bank, as at 11:47 am, more than 4.33 crore shares of ICICI Bank exchanged hands on both NSE and BSE with about 4.17 crore shares on NSE alone.
The investigative agency Central Bureau of Investigation has initiated a preliminary enquiry to evaluate the alleged misconduct with respect to a loan given to Videocon Group. According to a report by The Indian Express, Videocon Chairman Venugopal Dhoot entered into a joint company with Deepak Kochhar — the husband of ICICI Bank MD & CEO Chanda Kochhar. The move reportedly benefitted Deepak Kochhar to the tune of Rs 64 crore.
Later, ICICI Bank extended a loan of Rs 3,25o crore to Videocon Group as part of the 10-bank lending consortium. Venugopal Dhoot, Chairman, Videocon Group has denied any dealings with Deepak Kochhar, the husband of ICICI Bank MD and CEO Chanda Kochhar, beyond investing Rs 2.5 lakh in Deepak’s renewable energy business.
The Central Bureau of Investigation has launched a preliminary investigation into Deepak Kochhar, as well as officials of ICICI Bank and Videocon Group to assess whether there was any wrongdoing in lending practices, Reuters reported citing unidentified sources. According to a PTI report, the officials of the Central Bureau of Investigation have been examining the relevant documents of the transactions and if any traces appears that indicates a malpractice then ICICI Bank’s CEO and MD Chanda Kochhar and her husband Deepak Kochhar could be summoned for detailed questioning.
The sentiment was also down as ICICI Bank has been slapped with a penalty of Rs 58.9 crore for breaching the directions of the Reserve Bank of India on the sale of government securities. “The Reserve Bank of India (RBI) has imposed through an order dated March 26, 2018, a monetary penalty of Rs 589 million on ICICI Bank Limited for non-compliance with directions issued on direct sale of securities from its HTM (held-to-maturity) portfolio and specified disclosure in this regard,” RBI said in a notification on the evening of 29 March 2018, after the trading hours. The stock market has opened today for the first time since then.