ICICI & Videocon Loan Case- 2 Years back, RBI found no Quid Pro Quo

By: Makemymoney

2 years back Reserve Bank Of India had conducted a detailed scrutiny to probe allegations of impropriety in ICICI bank. The allegation on ICICI Bank was imposed for extending loans to Videocon Group but they found no proof “quid pro quo” or any other form of benefit according to RBI documents.

The Reserve Bank of India had undertaken a scrutiny in mid-2016 after PM’s office referred to it allegation on Deepak Kochhar, husband of ICICI Bank MD & CEO Chanda Kochhar. Videocon Group is a large debtor of ICICI bank. In the year 2012, ICICI Bank has sanctioned Rs. 1,730 Crore to Videocon Group and this was notified by the RBI in mid of July 2016. It went on to state that it was difficult to establish any conflict of interest in the sanctioning of the loan but flagged that it was not able to determine the sources of funding in some of the transactions involving Deepak Kochhar’s renewable energy venture NuPower.

Found No quid pro quo from ICICI Loan to Videocon Group

The Income Tax Department has issued a notice to Deepak Kochhar in connection with its tax evasion probe in the Videocon bank loan case. The notice has been issued to Deepak Kochhar under section 131 (power regarding discovery, production of evidence) of the I-T Act. Under this section, he has been asked to furnish details of his personal finances, Income Tax Returns for the last few years and business transactions with the firm NuPower Renewable. The deal recently made news after reports questioned the loan and linked it to a possible quid pro quo that Videocon group promoter Venugopal Dhoot allegedly had with NuPower Renewables, a company founded by Deepak Kochchar.  Above all, few more notices have been sent to the people associated with the firm and further action will depend upon their replies.

Also, the CBI had questioned few of the Bank officials and called Deepak Kochhar also for questioning, as a part of the preliminary inquiry. The reason behind questioning ICICI Bank Officials is to find if any quid pro quo was involved in the bank issuing Rs. 3,250 crore loan in 2012 to Videocon Group. Before lodging, any FIR, Preliminary inquiry is a precursor of collecting all possible details and evidence-based of former exercise.

Chanda Kochhar on Early Retirement: ICICI Bank Accepted Resignation

Joined ICICI Bank in 1984 as a Management Trainee and now hitting the exit door as CEO and MD Chanda Kochhar has been on leave since June 2018. This is the time period when she faced an allegation of conflict of interest. A statement from the bank on 4th.Sep’18 by the board of directors has “accepted the resignation of Chanda Kochhar, who is seeking for early retirement from the bank at the earliest”. The board accepted this request with immediate effect. However, the inquiry by the board will remain unaffected.  

The whole allegation game started when Kochhar was exposed for Videocon loan fault. ICICI Bank has sanctioned Rs. 3,250 loan to Videocon, this was a loan issued to Videocon during Kochhar’s work duration. This later turned as NPA (Non-Performing Asset).

The bank has appointed Sandeep Bakshi as CEO & MD, he will take over all roles & responsibilities for a period of 5 years. However, he has joined ICICI as a de facto boss in June’18. Though he has been appointed on an immediate node, most in industry expecting Bakshi would eventually take over as full-time ICICI CEO.

Also, it is expected that the case will wrap up and submit a report by November 2018. There is a buzz in the market that, what if Kochhar whose term was originally supposed to end in March 2019, would come back and join in case if she gets a clean chit.  


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