Videocon NPA dwarfs image of ICICI Bank, Kochhar
The reputation of yet another bank is at stake, the only way this one differs from the myriad of bank frauds that have been uncovered is that it's a private bank and it's non other than ICICI Bank, which is one of India's largest private bank.
If the public sector banks are facing scrutiny for loans sanctioned on back of pressures from the government or influential politicians, the private banks are now under the scanner for vested interests and other such possible favoritism in granting of unworthy loans to defaulting borrowers.
Radar of investigating agencies and following them the media attention is now on the loans given to Videocon Industries and the role that ICICI Bank's chief Chanda Kochhar might have played in approving those loans. Among the web of transactions done by Videocon Industries is a joint venture with NuPower Renewables, headed by Deepak Kochhar, Chanda's husband. It is alleged that Videocon Group's promoter Venugopal Dhoot transferred around Rs. 300 crores NuPower as a kick back for sanctioning more than Rs. 3,000 crore to Videocon Group companies.
Videocon Industries and Videocon Group companies are facing insolvency proceeding as they owe more than Rs. 40,000 crore to banks. ICICI Bank has also declared Videocon loan account as a non-performing asset (NPA).
ICICI Bank's board has strongly refuted the claims made by various news reports alleging that Kochhar had ‘conflict of interest’ in sanctioning the loan. ICICI Bank was part of a consortium of over 20 banks sanctioned credit facilities to the Videocon Group in 2012. The bank reiterated that Kochhar was not the chairperson of the Credit Committee that sanctioned the role and it has full faith in her. In statement the bank clarified that no employee, whatever may be their position can influence or override the bank's structured and standardised loan approval process.
Meanwhile, the stock of ICICI Bank closed at Rs. 278.40 per share, down by 1.94 per cent, while Videocon Industries was at Rs. 13.07 per share, down by 4.39 per cent on Wednesday.