Following the Punjab National Bank fraud amounting to more than Rs.120 billion, the banking sector in India has been put under tremendous pressure over their lending practices, and India’s third-largest lender in the country – ICICI Bank – too has come under the radar of the Central Bureau of Investigation (CBI) for suspicious lending practices which has turned perilous with regard to their stock market. According to a source, ICICI Bank has experienced its biggest stock dip in a single day in almost three years – all due to the ongoing investigation by the CBI and investors lack of trust in the bank.
According to a source, the ICICI Bank stock market at the end of the day dipped by Rs.16.5 or 5.93% at Rs.261.9 – the lowest since April 24, 2015. Subsequently, the market valuation also marked a dip of Rs.104.52 billion – standing currently at Rs.1.68 trillion on the BSE. The sudden dip of the ICICI Bank’s stock market was linked to the CBI’s investigation on the bank’s association with Videocon Group CEO, Chanda Kochhar. As per the recent rumours Videocon Group CEO, Chanda Kochhar, is under the radar of the CBI for credit corruption though the group has backed its CEO in a statement saying they have confidence that their CEO is not involved in any sort of corruption, and Videocon’s CEO’s association with ICICI Bank for a possible conglomerate has put the bank under investigation as well. In addition, ICICI Bank is under heat from the Reserve Bank of India for deviating from the rules with regard to sale of Government Bonds, and might very well have to cough up a penalty of Rs.589 million.
Following the recent frauds that have rocked the banking sector, Axis Bank stock has dipped by 11% while ICICI Bank stock have experienced a drop of 15% in the last three months – a percentage that could go north in the near future due to the aforementioned reasons.
The contents of this post/blog does not constitute financial or other professional advice nor does it imply in any manner a principal-agent relationship, and is not a professional advice on a specific financial matter.