ICICI-Videocon loan controversy: Only a thorough probe can reveal details of the case, says Naresh Malhotra

An independent probe needs to be carried out into the ICICI Bank-Videocon loan controversy and, till then, it is unfair to point fingers at anyone, and label him/her guilty, said senior banker Naresh Malhotra. All aspects of the loan approval process and collateral pledged needs to be examined, said Malhotra, who was speaking at the Firstpost State of the Economy Dialogues.

Malhotra said it is wrong to describe all allegations of wrongdoings in the banking industry as ‘scams’.

But in cases such as the Punjab National Bank (PNB) scam, clearly all concerned officials and auditors failed to pay attention to existing rules and regulations, he said.

There is a need to ensure that bank employees at all levels comply with risk management rules to avoid repeats of the PNB fraud. The Indian banking sector is facing a tough time following back to back scams, beginning with the PNB-Nirav Modi episode.

The latest in the series is an alleged quid-pro-quo deal between the Videocon Group and ICICI Bank’s Managing Director and CEO Chanda Kochhar. The Central Bureau of Investigation (CBI) is currently looking into matter.

Malhotra opined that bank scams have shaken the public’s faith in the banking system to an extent and that investigations into these scams should not take the shape of a witch-hunt.