ICICI Bank fell 4.35% to Rs 266.30 at 9:23 IST on BSE after the bank said its board expressed and reposed full faith and confidence in its MD & CEO, Chanda Kochhar.
Meanwhile, the S&P BSE Sensex was up 121.62 points, or 0.37% to 33,090.30.On the BSE, 2.69 lakh shares were traded in the counter so far compared with average daily volumes of 16.12 lakh shares in the past two weeks. The stock had hit a high of Rs 274 and a low of Rs 265.60 so far during the day. The stock hit a record high of Rs 365.65 on 29 January 2018. The stock hit a 52-week low of Rs 241.07 on 24 April 2017.
Media reports alleged that the bank sanctioned Rs 3250 crore of loans to Videocon Group because its chairman Venugopal Dhoot supposedly had dealings with NuPower Renewables, founded by ICICI Bank's MD & CEO Chanda Kochhar's husband Deepak Kochhar.
ICICI Bank clarified to the bourses after market hours on 28 March 2018 that its board reviewed the bank's internal processes for credit approval and found them robust. The board also expressed and reposed full faith and confidence in its MD & CEO, Chanda Kochhar.
In 2012, a consortium of over 20 banks and financial institutions sanctioned facilities to the Videocon group (Videocon Industries and 12 of its subsidiaries/associates as co-obligors) for a debt consolidation programme and for the group's oil and gas capital expenditure programme aggregating approximately Rs 40000 crore.
ICICI Bank was not the lead bank for this consortium and the bank only sanctioned its share of facilities aggregating approximately Rs 3250 crore which was less than 10% of the total consortium facility in April 2012. ICICI Bank's share of the banking sector's exposure to the Videocon group was less than 10% while around 90% of the loans were sanctioned by other banks and financial institutions.
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Hence the board concluded that there is no question or scope of any favouritism, nepotism or quid-pro-quo. The bank clarified that none of the investors of NuPower Renewables are borrowers of ICICI Bank.
In a separate announcement on 29 March 2018, ICICI Bank said that the Reserve Bank of India (RBI) imposed through an order dated 26 March 2018, a monetary penalty of Rs 58.90 crore on ICICI Bank for non-compliance with directions issued by RBI on direct sale of securities from its Held To Maturity (HTM) portfolio and specified disclosure in this regard.
ICICI Bank clarified that RBI has imposed a penalty on the bank for continued sale of government securities classified as HTM. ICICI Bank continued with the sales from HTM category for a few weeks during the quarter ended 31 March 2017, due to a genuine misunderstanding on the timing of the applicability of RBI's direction in this matter. As per RBI guidelines, the bank had disclosed in its annual report for FY2017 that it had sold more than 5% of investments categorised as HTM. However, the bank had not made the specified additional disclosure at that time. The bank has subsequently been making the specified disclosure as directed by RBI in the audited financial results since the quarter ended 30 June 2017.
During the current year, i.e., FY 2018, the Bank has sold less than 5% of securities from its HTM portfolio. The bank would like to re-iterate that it continues to give utmost importance to regulatory compliance and endeavors to meet supervisory expectations.
ICICI Bank reported 32.4% slide in net profit to Rs 1650.24 crore on 4.1% fall in total income to Rs 16832.22 crore in Q3 December 2017 over Q3 December 2016.
ICICI Bank is one of the leading private sector banks in India.
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