The Reserve Bank of India (RBI) had in 2016 probed ICICI Bank’s loan process following allegations from whistelblower arvidn about potential conflict of interest in credit facilities extended by the bank to the videocon group accoriding to banking industry sources.
The central bank had closed the probe — after ICICI Bank had submitted a detailed response to its queries —as it was unable to find conclusive evidence of any conflict of interest, the industry sources who did not wished to be named said. receiving a detailed response. ICICI Bank, in turn, had submitted a detailed response to the central bank’s queries following which further probe was not continued by the banking regulator nor any conclusive evidence of wrong doing was observed, banking industry sources said.
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Last week, the Central Bureau of Investigation (CBI) disclosed that it had started a preliminary inquiry into a ₹3,250 crore-loan given by the ICICI Bank to Videocon Group and is probing an alleged nexus between Videocon Group chairman Venugopal Dhoot and Deepak Kochhar, the husband of ICICI Bank CEO and MD Chanda Kochhar.
In March 2016, Mr. Gupta, also an investor in Videocon Industries, wrote a letter to the Prime Minister alleging a quid pro quo that led the ICICI Bank provide loans to Videocon Industries. The complaint was also marked to the Finance Minister, the then RBI Governor Raghuram Rajan, the then SEBI chairman U.K. Sinha and the CBI and the Enforcement Directorate.
With the allegations resurfacing over the past month, the ICICI Bank’s board reviewed the bank’s internal processes for credit approval and said they were robust. The board also reposed full faith and confidence in Ms. Kochhar.
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On Monday, the bank had also informed the stock exchanges that it’s board met to review cases pending before the National Company Law Tribunal under Insolvency and Bankruptcy Code. The bank clarified that the meeting was pre-scheduled and that the board had been meeting regularly in the first week of April in the previous years too, to review the progress the in resolution of large accounts.
ICICI Bank had said last week that its exposure to Videocon Industries was ₹3,250 crore which was less than 10% of the total loans given by a consortium of 20 banks in April 2012. The total loan extended by the lenders’ consortium to the Videocon Group, including Videocon Industries and 12 of its subsidiaries, was about ₹40,000 crore.
“We have satisfactorily replied to all the questions of the regulators which is an on-going process for a regulated entity like a bank and the regulator of government departments,” ICICI Bank chairman M.K. Sharma had said during a media interaction last week.