Home / Companies / News /  Whistleblower complaints against ICICI Bank: The story so far

Mumbai: In March, ICICI Bank Ltd received a third whistleblower complaint alleging it inflated profits by at least $1.3 billion over eight years by delaying provisioning for 31 NPA accounts. The complaint accused top executives of wilfully breaching rules.

What are the latest allegations?

The whistleblower, an ICICI Bank employee, filed complaints on 20 and 22 March alleging the bank deliberately did not set aside funds to cover 31 defaulting loan accounts between fiscal 2008 and March 2016. The person said the bank inflated profits, mainly by underreporting the quantum of bad loans to these firms, delaying impairment for more than four years in some cases. The complaint also said top executives, including CEO Chanda Kochhar, breached rules to avoid classifying the loans as bad.

Also read: Chanda Kochhar and ICICI Bank: A bitter parting?

How did ICICI Bank respond?

ICICI Bank set up an enquiry under the supervision of its audit committee after it got the whistleblower complaints. The findings of the report did not reveal any material impact on the financial statements for FY18, the bank said. A copy of the report was also submitted to the banking regulator. ICICI Bank said 29 loan accounts were classified as NPAs between the year ended 31 March 2012 and 31 March 2017, and the remaining two by 31 December 2017. The bank admitted to some delays in the classification of these accounts.

What was RBI’s response to the complaint?

The banking regulator began a second probe into ICICI Bank’s affairs within days of receiving the whistleblower complaints in March.

What else is RBI doing?

RBI began its probe into at least 26 of 31 loan accounts named in the whistleblower’s complaints initially. However, after ICICI Bank’s response to some queries, on 11 April, it decided to expand its probe to 55 of ICICI Bank’s borrowers. The regulator also asked ICICI Bank to provide details such as the total exposure of these borrowers, if they were NPAs or not and provisioning amounts spent by the bank after the accounts became NPAs.

Also read: Did ICICI Bank inflate profits, breach NPA rules?

What about Sebi?

Sebi is set to begin adjudication proceedings against ICICI Bank and CEO Kochhar for non-disclosure of information in the Videocon case. PTI reported on 25 June that Sebi, in a preliminary report, had found there was conflict of interest. On 23 May, Sebi issued a notice to the bank and Kochhar, asking for their response on alleged non-compliance with disclosure norms. Sebi is also probing if the board knew about the conflict.

Also read: Corporate India is equally to blame for the banking crisis

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