ICICI Bank fined for Hong Kong licence breach

ICICI Bank has been fined Rs 2.2 lakh by Hong Kong's Securities and Futures Commission (SFC) for breach of licence. The regulator has charged the bank with carrying on private banking business in Hong Kong without requisite licence, between June 15, 2004, and March 8, 2006.

The bank has also been ordered to reimburse investigation costs to SFC, which could be another HK$ 40,000.

The bank, based on the findings of an internal review conducted after the discovery of this incident in April 2006, has dismissed two employees, among whom was Arnab Basu, CEO, Hong Kong operations.

"The contravention was limited to a small segment of the branch's business in Hong Kong and has not resulted in any loss to the bank or its customers," ICICI Bank told the Bombay Stock Exchange.

The bank has long term plans for its operations in North and East Asia with Hong Kong being the hub of these operations,".

ICICI Bank shares closed 0.40 per cent up at Rs 857.90 on the Bombay Stock Exchange today.

In January 2006, the bank was penalised along with select other banks by the Reserve Bank of India for violating know-your-customer guidelines in the IPO allotment scam in which multiple demat accounts were used by a string of investors to corner a large chunk of the retail portion in initial public offers.

ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai International Finance Centre and representative offices in the United States, United Arab Emirates, China, South Africa and Bangladesh. The total assets of the bank's international branches stood at around Rs 40,300 crore ($9.1 billion) on December 31, 2006.