Videocon loan case: RBI initiates another probe against ICICI Bank over whistleblower complaints

Spelling trouble for ICICI Bank, the Reserve Bank of India has reportedly lauched a secondary probe against the bank taking note of the whistleblower complaints
over Videocon loan case. According to a report published in Mint, RBI started the second probe on 25 March. The first one was initiated in 2016 after another whistleblower alleged conflict of interest in CEO Chanda Kochhar’s dealings. RBI had then said the allegation “could not be conclusively established”. 

The secong investigation came in wake of allegations that ICICI Bank Ltd delayed provisioning for stressed loans and loan evergreening, among other wrongdoings, the publication stated. 

RBI began its probe into at least 26 of the 31 loan accounts named in the whistleblower’s complaints initially, including Anil Printers Ltd, Karuturi. Overseas Ltd, Venkatesh Logistics Ltd and Orchid Hotels Pune Pvt. Ltd. However, following ICICI Bank’s response to its queries regarding the loan given to Anil Printers, RBI on 11 April decided to expand its probe to 55 of ICICI Bank’s borrowers.

In an emailed response to queries sent by Mint on Monday, ICICI Bank said, “RBI in the normal course of its supervisory activities seeks information from the Bank from time to time. The statements made in your email as to the same are not reliable.”

Meanwhile, a preliminary examination by regulator Sebi has favoured adjudication proceedings against ICICI Bank and its CEO Chanda Kochhar for alleged violation of listing disclosure norms regarding 'conflict of interest' in business dealings of her husband with Videocon group.

ICICI Bank may face a penalty of up to Rs 25 crore under the relevant Sebi regulations for such lapses, while the fine for Kochhar may go up to Rs 1 crore, besides other penal actions, a senior official said.

The adjudication process will convene formally soon after taking into account the replies to the show-cause notices issued by Sebi to ICICI Bank, Kochhar and others in this matter, the official added.

Besides Sebi probe, ICICI Bank's board has also constituted an "independent enquiry" and Kochhar has gone on leave till completion of this enquiry.

According to a regulatory filing by the bank last week, Kochhar will continue as MD and CEO, though the group's life insurance arm head Sandeep Bakshi has been appointed as a whole time director and COO. Bakshi will report to Kochhar and will handle the day-to-day operations in her absence.

The bank has maintained that its board has full faith in Kochhar.