The Reserve Bank of India (RBI) on Thursday imposed monetary penalty worth Rs. 58.9 crore on ICICI Bank, the country's biggest private bank, for failing to abide by rules on the sale of bonds in the held-to-maturity (HTM) category.
In a rare move, The Reserve Bank of India (RBI) on Thursday imposed monetary penalty worth Rs. 58.9 crore on ICICI Bank, the country's biggest private bank, for failing to abide by rules on the sale of bonds in the held-to-maturity (HTM) category.
"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 (the bank) for non-compliance with directions issued by RBI on direct sale of securities from its HTM portfolio and specified disclosure in this regard," RBI mentioned in a release.
It added that the penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions/guidelines issued by RBI.
"This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," the release added.
Meanwhile, ICICI Bank board on Wednesday came out in support of its Managing Director and CEO Chanda Kochhar, saying it has full faith and confidence in her and described certain reports against her regarding credit disbursement to Videocon group as "malicious and unfounded rumours".
ICICI Bank board also reviewed the bank's internal processes for credit approval and found them robust, the private sector lender said in a regulatory filing. Certain reports have appeared on a website alleging involvement of Kochhar and her family members in a loan provided to Videocon group on quid pro quo basis. It was also pointed out that a complaint had been forwarded to Prime Minister Narendra Modi and others for necessary action against Kochhar.
"The board has come to the conclusion that there is no question of any quid pro quo/ nepotism/ conflict of interest as is being alleged in various rumours. "The Board has full confidence and reposes full faith in the Bank's MD and CEO Ms. Chanda Kochhar," the bank said. It also said that rumours are being spread to malign the bank and its top management. With regard to the exposure to the Videocon group, it said the bank's current exposure is a part of the syndicated consortium arrangement.
"ICICI Bank was not the lead bank for this consortium and the bank only sanctioned its share of facilities aggregating approximately Rs 3,250 crore which was less than 10 per cent of the total consortium facility in April 2012," it added.
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 "RBI imposes penalty worth Rs 58.9 crore on ICICI Bank")
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