ICICI Bank commissions external probe into whistleblower’s complaint about 31 loan accounts

Private sector lender ICICI Bank has reportedly ordered an external probe into the complaints it received about 31 loan accounts from an anonymous whistleblower in March. The troubled bank has mandated law firm Panag & Babu to look into allegations that claim the lender inflated profits by at least $1.3 billion over a period of eight years by delaying provisioning for 31 non-performing asset (NPA) accounts,  The Economic Times reported. “In the past, the ICICI Bank board had to be nudged to initiate any enquiry. Now it’s clear they want to steer themselves out of any controversy, which is why they have initiated another probe,” an unnamed source familiar with the development was quoted as saying by the newspaper. On 22 June, ICICI Bank said that it received complaints about 31 loan accounts from an anonymous complainant. The lender conducted an enquiry and an interim report was submitted to the regulator. The bank, in a stock exchange filing on 22 June, said that in March 2018 it was “made aware” on the complaint that alleged, among other things irregularities in the conduct of some borrower accounts, resulting in incorrect asset classification. [caption id=“attachment_4411067” align=“alignleft” width=“380”] Representational image AFP[/caption] “The complaint was treated as a whistleblower complaint and an enquiry was instituted as per the Whistle Blower Policy of the Bank under the supervision of the Audit Committee of the Board of Directors, without the involvement of the senior management other than Internal Audit,” ICICI Bank said. The statutory auditors were provided periodic updates and their inputs were factored into the enquiry process. The interim report of the enquiry was reviewed in detail by the Audit Committee and statutory auditors, prior to finalisation of accounts for the year ended 31 March, 2018. “The findings in the interim report had no material impact on the financial statements for FY2018. The interim report has also been submitted to the regulator,” the private sector lender said. It further said the loans outstanding were fully classified as non-performing, with provisions made as per applicable norms. Most of those accounts were classified as non-performing between the year ended 31 March, 2012 and the year ended 31 March, 2017. Two accounts were classified by 31 December, 2017. The latest external probe is independent of the one being conducted by former Supreme Court judge, Justice BN Srikrishna . On 15 June, days after ICICI Bank’s Board decided to institute a “comprehensive enquiry” to look into allegations that MD and CEO Chanda Kochhar had not adhered to provisions relating to bank’s “code of conduct”, justice Srikrishna accepted the lender’s request to preside over that investigation. Justice Srikrishna has a mandate to examine whether Kochhar was involved in any quid pro quo transactions with certain borrowers. With inputs from agencies