RBI can run its own check, says Mundra
Mumbai: The corruption charges related to the ICICI Bank-Videocon Industries loan sanctions are significant enough for RBI to begin its own assessment and come to a conclusion for the benefit of the banking system, said the former deputy governor, SS Mundra.
“This case has become a matter of discussion,’’ Mundra told ET. “RBI can have its own independent check and come to a conclusion. RBI has got all the resources, experienced people. They can run an independent check and only then arrive at a decision.’’ ICICI Bank chief executive Chanda Kochhar is in the middle of a controversy after an activist shareholder alleged that there was quid pro quo in a loan sanctioned by the bank to Videocon group. But the bank board has said that the decision was above board and all the processes have been followed diligently.
In a letter to the prime minister, Gupta has alleged that members of the Kochhar family, Mahesh Advani and Neelam Advani, relatives of Ms. Kochhar, became the owners of Nupower Renewables as quid pro quo for loans through dubious transactions and the original founders of the company were the Dhoots.
Although the bank board, led by chairman MK Sharma threw its weight behind Kochhar, investigative agencies have launched a preliminary probe into the dealings between the bank and the Dhoots. But the banking regulator, the RBI, has been silent so far.
“Ultimately it is a judgement call,’’ said Mundra. “Sometimes there are frivolous complaints and sometimes motivated complaints. There is a judgement call required as to which case needs to be probed into in greater detail. I am reasonably confident that they must have initiated their independent assessment.’’ Ever since the allegations surfaced, the bank has lost crores in market value and saw its worst level on Monday. But it has recovered and ended 2.94 per cent higher at Rs 269.60 on the Bombay Stock Exchange.
The bank said that there was no conflict of interest as the loans were sanctioned by a consortium of 20 lenders and at ICICI it was sanctioned by a credit committee chaired by the then chairman KV Kamath.
“This case has become a matter of discussion,’’ Mundra told ET. “RBI can have its own independent check and come to a conclusion. RBI has got all the resources, experienced people. They can run an independent check and only then arrive at a decision.’’ ICICI Bank chief executive Chanda Kochhar is in the middle of a controversy after an activist shareholder alleged that there was quid pro quo in a loan sanctioned by the bank to Videocon group. But the bank board has said that the decision was above board and all the processes have been followed diligently.
In a letter to the prime minister, Gupta has alleged that members of the Kochhar family, Mahesh Advani and Neelam Advani, relatives of Ms. Kochhar, became the owners of Nupower Renewables as quid pro quo for loans through dubious transactions and the original founders of the company were the Dhoots.
Although the bank board, led by chairman MK Sharma threw its weight behind Kochhar, investigative agencies have launched a preliminary probe into the dealings between the bank and the Dhoots. But the banking regulator, the RBI, has been silent so far.
“Ultimately it is a judgement call,’’ said Mundra. “Sometimes there are frivolous complaints and sometimes motivated complaints. There is a judgement call required as to which case needs to be probed into in greater detail. I am reasonably confident that they must have initiated their independent assessment.’’ Ever since the allegations surfaced, the bank has lost crores in market value and saw its worst level on Monday. But it has recovered and ended 2.94 per cent higher at Rs 269.60 on the Bombay Stock Exchange.
The bank said that there was no conflict of interest as the loans were sanctioned by a consortium of 20 lenders and at ICICI it was sanctioned by a credit committee chaired by the then chairman KV Kamath.