Category: Finance

RBI did not do proper auditing, says CVC on PNB fraud

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Central Vigilance Commissioner K V Chowdary on Tuesday said the Reserve Bank of India (RBI) had apparently not conducted an audit during the period of time when a Rs 13,000-crore scam hit the Punjab National Bank.

Chowdary stressed the need to put into place a more robust auditing system.

“They did not do this (an audit),” the head of the probity watchdog told PTI.

The CVC exercises superintendence over the CBI, which is looking into the over Rs 13,000-crore PNB fraud case.

The RBI had the regulatory responsibility for the banking sector but any lack of integrity would be looked at by the Central Vigilance Commission, he added.

Chowdary said according to the RBI, it had switched over from a periodic audit to a “risk-based” audit, which is conducted when there is a financial risk involved.

“To determine risk, they must have some parameters. Based on that they would have done that (auditing). (But) there was no apparent audit by the RBI during this period (of fraud),” Chowdary said.

Union Finance Minister Arun Jaitley had in February slammed regulators for failing to detect the fraud, saying that unlike politicians, regulators in the Indian system were unaccountable.

Chowdary pointed out that the RBI issues general guidelines as a regulator and also when foreign exchange is involved.

“They are not going to see from branch to branch and bank to bank what they are supposed to do,” he said.

It was primarily the responsibility of the banks to ensure that their business was conducted in a proper and ethical way, he added.

He said when something goes wrong, “one cannot blame everybody”.

“There is a systemic issue (here),” Chowdary said. “They (RBI) have decided instead of every year or every once in two, three or four years, they will do it (risk-based auditing). It is a good policy. But how they determine the risk parameters… and why this (fraud) did not come up are matters of detail.”

He, however, clarified that it was not just the PNB where an alleged fraud had taken place or that other banks were “100% correct”.

“But we have to only hope that they (the other banks) have a better system and that they are following the system,” Chowdary said.

On a bank’s role in checking frauds, he said there are “no timelines” when it comes to deeper decision making processes.

“There should be defined timelines. The preventive vigilance mechanism has to be strengthened. The guidelines and operating procedures have to be strengthened. It has to be ensured that they are followed,” said CVC.

Asked about the investigation in the PNB scam, he said what the CVC was doing in the case could not be disclosed now as “it is work in progress”.

“There are so many issues that the CVC is examining both with reference to processes set in motion by the RBI,” Chowdary said.

The CBI is among various agencies looking into the over Rs 13,000-crore fraud allegedly committed by billionaire jeweller Nirav Modi and his uncle and Gitanjali Gems promoter Mehul Choksi.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

The Insolvency Code is stuffed with severe flaws and will not achieve its purpose

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Joseph-Ignace Guillotine was against the death penalty and urged the French National Assembly in 1789 to adopt “a fair and simple mechanism” to make the punishment more humane. He petitioned King Louis XVI. Guillotine hoped that making the death penalty humane would be the first step to its abolition.

The Insolvency and Bankruptcy Code, 2016 (IBC), was introduced as a law that would provide a new, fair, efficient and simple mechanism for resolving NPAs. The problem with over-simplification, irrespective of good intentions, is that at times they result in larger unintended problems.

If not immediately reviewed and rectified, the IBC is well on its way to lead to suspension of lending activity, stalled projects, erosion of value of Indian enterprises, faster growth of unemployment, increased costs of lending, and vesting of assets developed through public sector debt financing (read taxpayers money) with non-resident vulture funds. Parallel with the IBC is the RBI’s recently announced “Revised Framework” for “stressed assets” issued on February 12, directing lenders to classify loan accounts as “stressed” immediately on default and as a NPA in case of “any restructuring” of the loan.

Huge Toll on the Judiciary

The term “loan” has been defined very broadly to include “any concession” granted by the lender to the borrower for economic or legal reasons related to the “borrower’s financial difficulty”. The RBI’s mandate to lenders will place an unnatural load on the judiciary dealing with corporate insolvency, much like immediately expecting a hippopotamus to run a mile in seven minutes.

The main problem with the IBC is that, apart from having been a result of a cut-paste effort of adapting from English law, its framework is not a load bearing structure particularly for the volume that would be generated after RBI’s “new framework”. Also, its one-size-fits all prescription has the ability of being abused as a contract enforcement mechanism, or a debt recovery mechanism, which require fundamentally different approaches that can address the specific merits of the dispute.

Further, the process under the IBC does not provide for due classification based on the specific requirements of each sector or industry and the how that may be addressed. There is no provision preventing otherwise healthy companies that are not defaulting on loans to lenders being taken through the IBC by the so-called “operational creditors”.

Added to this, the recent insistence that promoters should not participate in the resolution process defies reason. Apart from negating the basic principles of corporate law (where companies are separate legal entities, and the “corporate veil” is lifted only in identified extreme circumstances), the exclusion of promoters is confounding if the intention is to get the best deal for the lenders and other stakeholders. Prohibiting promoters from participating in the resolution process also begs the question of what will happen if larger public sector undertakings start being put through the IBC process.

For example, what will happen if GAIL, which has entered into financial obligations estimated to total $30 billion under long-term LNG purchase contracts with US companies at prices which the Indian market cannot absorb, defaults on its take or pay obligations and the US entity files as an operational creditor seeking GAIL to be put through the IBC process for recovering the ship or pay amounts due?

Needed: A Serious Review

The flaw in the approach of the IBC, coupled with the RBI directions, is that they are seeking to resolve economic issues and banking sector regulatory issues through the tool of the insolvency process, which is simply not capable of addressing the underlying concerns. The IBC clearly needs a rethink and more importantly needs to be amended to prevent large-scale unintended consequences. Unfortunately, the recently released Report of The Insolvency Law Committee has failed to address the core issues that lie in the structure of the IBC and instead has only made recommendations addressing only a few issues that have arisen in the first few months of implementation of the IBC.

Interestingly, the report itself recommends creating special treatment for promoters of MSMEs and home buyers in real estate sector, but fails to follow through on the underlying issue that IBC will eventually need to recognise that each type of industry and infrastructure sector will need special treatment and that there is a need to change the basic structure of IBC itself.

The Guillotine was used 16,594 times between June 1793 and July 1794 including on the king who had approved it, which of course was not its intended consequence. Guillotine spent the rest of his days unsuccessfully petitioning that his name not be associated with the machine. One can only hope that the IBC does not suffer a similar fate.

Piyush Joshi heads the Projects and Project Finance unit at Clarus Law Associates.

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RBI drops Axis Bank from list of bullion importers

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Reserve Bank of India (RBI) late on Monday dropped Axis Bank from a list of banks it has cleared to import gold and silver in the current financial year that began April 1.

It was unclear why Axis, one of India’s leading importers of bullion, did not feature in the list that was released late on Monday.

Axis Bank and the Reserve Bank of India were not immediately reachable for comment. Bank of Baroda, HDFC Bank and Bank of Nova Scotia were among the 16 banks allowed to import bullion. Two other small banks Karur Vyasa and South Indian Bank, were also dropped from the RBI list.

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Chanda Kochhar’s brother-in-law’s firm advised ICICI borrowers, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Chanda Kochhar’s brother-in-law was involved in deals to restructure foreign currency-denominated debt, worth over $1.7 billion, of seven companies over the last six years, The Indian Express reported.

Avista Advisory, a Singapore-based firm founded by Rajiv Kochhar, received the above-mentioned mandate, according to the paper.

Kochhar’s brother-in-law’s firm was required to restructure the debts in six years. The companies, the paper points, are borrowers of ICICI Bank, putting Chanda Kochhar, Managing Director of the bank, in yet another case.

The paper pointed that ICICI Bank has led lenders in at at least one of the deals.

The disclosures by the Singapore-based firm, accessed by the paper, said that the firm acted as an advisor in restructuring debt of Jaiprakash Associates, Jaiprakash Power Ventures, GTL Infrastructure, Suzlon, JSL and Videocon Group.

The ICICI Bank and Videocon loan case has been the talk of the town lately.

News reports suggested that Deepak Kochhar, husband of Chanda Kochhar, who set up Videocon group in December 2008 along with Venugopal Dhoot, said two of Chanda Kochhar’s relatives lent Rs 64-crore loan to the firm through a fully owned entity. This was believed to be before he transferred the latter’s ownership to a trust headed by her husband.

The reports raised questions of conflict of interest as the transfer of the company to Deepak Kochchar happened six months after the Videocon Group got a loan of Rs 3,250 crore from ICICI Bank.

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Would have liked greater clarification on Videocon loan, says former ICICI Bank chairman

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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ICICI Bank’s clarifications on the Rs 3250 crore loan to Videocon Group could have been done in greater detail,  N Vaghul, former chairman of the bank said.

Vaghul also supported the bank’s CEO, Chanda Kochhar, and said, “I know her now for 35 years, 25 years I worked closely with her. I cannot even imagine that she could ever be party to a transaction which could have a shadow of doubt or anything like that.”

Two of India’s top private sector bankers have come under fire— ICICI Bank’s Chanda Kochhar is battling allegations of “conflict of interest” over her husband’s business dealings with Videocon Group’s Venugopal Dhoot.

The bank’s Rs 3250 crore loan to Videocon Group has come under question with the CBI filing a preliminary enquiry (PE). Sources say Chanda Kochhar and her husband Deepak Kochhar are likely to be asked to join the probe.

On the other hand, Reserve Bank of India has raised questions over Axis Bank giving Shikha Sharma a fourth term as the MD and CEO.

Shares of both ICICI Bank and Axis Bank plunged in trade as both the private sector banks have trouble brewing in their corner offices.

Here is how the entire Kochhar-Dhoot controversy came to light. In a letter written in 2016 to the Prime Minister’s Office, an investor called Arvind Gupta had alleged, what he called— “illicit banking and commercial relationship” between ICICI Bank’s CEO Chanda Kochhar’s family and Videocon Group’s Venugopal Dhoot.

Gupta claims to be an investor in both ICICI and Videocon. He alleged a “potential conflict of interest” in ICICI Bank granting a Rs 3250 crore loan to Videocon Group which later became a non-performing asset.

In his letter, Gupta claimed that Chanda Kochhar’s husband had business dealings with Videocon Group’s Venugopal Dhoot. The ICICI Bank board has thrown its weight behind Chanda Kochhar. ICICI Bank’s Chairman MK Sharma has called the allegations “malicious and unfounded.”

Shereen Bhan spoke to N Vaghul Former Chairman of ICICI Bank, Shriram Subramanian Founder & MD of InGovern, Prabal Basu Roy Sloan Fellow – London Business School PE Investor & Startup Advisor and Sandeep Parekh Founder of Finsec Law Advisors to discuss the issues.

N Vaghul speaking on the issue said, “These allegations were there in 2016, then again were repeated in 2018. I heard Mr Sharma’s statement, I know these two people very well. Mr Sharma personally is a person with unimpeachable integrity and I think more than unimpeachable integrity, he is very thorough in whatever he does. When he makes a statement that there is no conflict of interest, there is no quid pro quo, it was done in the normal course, I have no reason to doubt his statement. As far as Chanda Kochhar is concerned, I know her now for 35 years, 25 years I worked closely with her. I cannot even imagine that she could ever be party to a transaction which could have a shadow of doubt or anything like that.”

He added, “I did find that the clarifications could have been done in a greater detail. When clarification came, I wanted to find out what exactly is happening because in 2016 I did not pay much attention to it. I did not know who was making that allegation, it came in a series of WhatsApp messages to me and when the bank said there is no truth in it, I believed in it. In 2018 it was made an individual through a letter that was written. So, it had to be taken seriously and the whole thing went into public domain.”

He further added, “I would divide this whole issue into two parts – one part which pertains to ICICI Bank and another part to Chanda Kochhar’s proprietary issues. So far as the ICICI Bank is concerned, Mr Sharma has made a statement that Rs 3250 crore loan was not a loan which was given in 2012 but it represents what is known as consolidation of loan which was in existence at that time. So, this was the issue on which I made enquiry in the bank as to what exactly is the Rs 3250 crore loan. I was told that Rs 3250 crore represents the exposure of the ICICI Bank at that particular point of time. What happened was at that time – 2012, there was a decision by the lead bank – which was State Bank of India, to consolidate all the loans which were given to Videocon Industries and few other subsidiaries – more than 10 subsidiaries into a single loan in order to capture the cash flows and capture the full security. ICICI Bank participated in that consortium of 20 banks. Participation was no more than the exposure which they already have of loans which have been given right from the beginning. The Rs 3250 crore is not a new loan that has been given to Videocon but it represents a consolidation of the existing loans given to the Videocon and subsidiaries has not come out.”

Below is the excerpt of N Vaghul’s interview.

Shereen: If I may start by asking you these were allegations that were first brought to light in 2016. As per what MK Sharma told us in that press conference the board of ICICI Bank looked to those allegations and apparently adequately addressed them? Should this not have been made public? Should this not have been put out in the public domain to address the allegations that were first raised in 2016 if indeed the board had found that there was no discrepancy of any kind that there was no mala fide of any kind, that there was nothing improper in the transactions that had been done?

A: These allegations were there in 2016, then again were repeated in 2018. I heard Mr Sharma’s statement, I know these two people very well. Mr Sharma personally is a person with unimpeachable integrity and I think more than an unimpeachable integrity, he is very thorough in whatever he does. When he makes a statement that there is no conflict of interest, there is no quid pro quo, it was done in the normal course, I have no reason to doubt his statement. As far as Chanda Kochhar is concerned, I know her now for 35 years, 25 years I worked closely with her. I cannot even imagine that she could ever be party to a transaction which could have a shadow of doubt or anything like that.

I don’t know the full details. I did find that clarifications could be a little more done in greater detail. When the clarification came, I wanted to find out what exactly is happening because in 2016 I did not pay much attention to it. I did not know who was making that allegation. It came in a series of WhatsApp messages to me and when the bank said there is no truth in it, I believed in it.

In 2018 it was made by an individual through a letter that was written. So, I think it had to be taken seriously and 2018 the whole thing went into a public domain. What was a loose rumour you don’t put it in the public domain.

Shereen: If I can specifically ask you since you said that you decided to take the allegations much more seriously in 2018 and you have asked the bank question specifically with respect to the allegations made what is the clarity that you have got on this convertible debenture of Rs 64 crore because that is really at the heart of the controversies isn’t it?

A: I would divide this whole issue into two parts – one part which pertains to ICICI Bank and another part to Chanda Kochhar’s proprietary issues. So far as the ICICI Bank is concerned, Mr Sharma has made a statement that Rs 3,250 crore loan was not a loan which was given in 2012, but it represents what is known as consolidation of the loan which was in existence at that time. So, this was an issue on which I made enquiries in the bank as to what exactly is the Rs 3,250 crore loan. I was told that Rs 3,250 crore represents the exposure of the ICICI Bank at that particular point of time. What happened was at that time – 2012, there was a decision by the lead bank – which was State Bank of India, to consolidate all the loans which were given to Videocon Industries and few other subsidiaries – more than 10 subsidiaries into a single loan in order to capture the cash flows and capture the full security.

ICICI Bank participated in that consortium of the 20 banks. Participation was no more than the exposure which they already have of loans which have been given right from the beginning. As far as I know that this Videocon had been dealing with ICICI Bank from the time of 1985. Their relationship with ICICI Bank was as long as about now 33 years. At the time when I left it was about 25 years. So the Rs 3,250 crore is not a new loan that has been given to Videocon, but it represents a consolidation of the existing loans given to the Videocon and the subsidiaries has not come out. I heard a few people talk about as though that Rs 3,250 crore of represents a new loan. I don’t think it is correct.

Latha: Nothing new was given after – in 2012 no additional money?

A: Nothing was given, no additional money. In fact 2012, I am told because I am not in bank, I can’t access the records. I am told that in 2012 what was given at Rs 3,250 crore represents the actual exposure of ICICI at that particular point of time, represents the series of loans given to Videocon and its subsidiaries over a period of time, over a period of last four-five years 2008-2012. In Rs 3,250 crore does not represent any increase in exposure. In fact when you take the total consolidation I am told that there is reduction in the share, so far as the consortium is concerned so new facilities were given in to 2012.

Latha: No covenants were changed because when it became a consortium loan new conditions?

A: I am sure, I am not privy to that I cannot say that. Certainly, I supposed there must have been a consolidation of security, there must have been escrow process in which you capture the cash flow. More important point is a proof of the pudding lies in the eating. In 2012 consolidation took place. Till 2017 the loan was a performing loan. They were paying the interest, they were paying the instalments. It was not as if that the loan was bad right ab initio. The loan was a performing loan in 2017 and in 2017 the loan became non-performing loan. Right now I think it has gone into the insolvency and it will be dealt with in accordance with insolvency.

Latha: Are the conditions imposed by ICICI in their covenants in 2012 similar to the covenants of other?

A: I am told that the ICICI covenant is almost identical to that of what SBI did. ICICI did not put any conditions, I think SBI and SBI capital market spear headed that transaction. So, it was in the broader interest to protect the interest of all the 20 banks that instead of each one giving separately for the subsidiaries it is all consolidation. That is why Mr. Sharma used the term that it is a consolidation loan. It is not a new loan.

Latha: I thought some of the bankers said that some of the loans given by ICICI were part of the consortium but some were outside the consortium?

A: That I don’t know. What I heard from the bank is that Rs 3,250 crore is total exposure and there were been serviced and it was being brought down to about Rs 2,000 crore odd over a period of five years.

Latha: Did you ask then whether they were fully aware that the managing director’s husband had got such a large investment or a loan from Videocon?

A: I don’t think they were aware that Mrs Kochhar’s husband was in the business. Whether there was a relationship with a Videocon I don’t think the board would have been aware of it. But the board would have been disclosed that Mrs Chanda Kochhar’s husband has a business.

Latha: Not the nature of the relation with Videocon?

A: That is not asked for. I mean no board would ask for it.

Latha: The board won’t ask for it, but is it not the duty of the managing director to say that?

A: In 2016 when the allegation was made I am sure that they asked for it. And 2016 I suppose what might have happen in 2012 what I am told again this is all hearsay. I am very carefully in what I say because these are not things which I know for certain. In 2012 the business of Deepak Kochhar, Mrs Chanda Kochhar’s husband was not doing well. The Supreme Energy something like that which had made that investment of Rs 64 crore asked Deepak Kochhar whether they can takeover that company. So, they took over that company with the liabilities.  Rs 64 crore of the asset and Rs 64 crore was the liability. I think they paid what you call the equity that is invested. For that equity of Rs 10,00,000 was something like that.

Latha: That means Deepak Kochhar’s company intends to redeem those debentures now?

A: Of course that is what I am told. Deepak Kochhar’s company has an obligation to redeem the debentures. The debentures, I believe were restructured into a long term debentures because the company was not making profit, the company is incurring losses. So, it has an obligation to repay their debentures and the debentures will have to be paid.

Shereen: If I may, while we heard from the ICICI Chairman about the transaction between Videocon and ICICI Bank, part of a consortium and so on and so forth, if in fact Chanda Kochhar has made the disclosure about the transactions – and I am talking post 2016 because the allegations came to light in 2016, has the ICICI Bank board examined these allegations for it to give a clean chit and say that there has been no instance of quid pro quo, there is no nepotism because then that means that the board has specifically looked at these transactions that involve Deepak Kochhar, Supreme Energy, and Venugopal Dhoot?

A: Answer to your question, I would like to put it this way that this is a problem with – we have to understand that women who come into the senior positions in the organisation, you cannot ask their husbands to step off and say that they should stop doing any business and it is not the purpose of the board to keep on asking will you please share the details of your husbands business to the board for every transaction that is being done.

Latha: Only in this instance, since it is a large loan, large investment that Videocon has made in Deepak Kochhar’s company, I mean Rs 64 crore is not laughing matter, doesn’t proprietary demand that Chanda Kochhar should have declared to the credit committee in which she was sitting?

A: You have to prove that Chanda Kochhar is aware of it, in a sense that is Chanda Kochhar managing ICICI Bank or is managing Deepak Kochhar’s business. If Deepak Kochhar is having a relationship with Videocon, how can you expect Mrs Kochhar to inform the board? No loan was been given in 2012, it was only a consolidation of the loan that has been given by the bank.

Latha: That is certainly a new point because we were under the impression fresh money was given in 2012.

A: I think that it is asking for too much because the Companies Act requires that you have to disclose the nature of the business of your husband and I am sure that if a loan were to be given of this order, Rs 3,250 crore is a large amount, Rs 64 crore for renewable energy is not a large amount.

Latha: Going by the little we know about NuPower, it has been making losses of Rs 10-12 crore thereabouts. Mrs Kochhar would know if Mr Kochhar got an amount as large as Rs 65 crore.

A: That I would not be in a position to comment.

Latha: If you were Chairman, would you have preferred that she had said it to the credit committee?

A: That is anybody’s thing. When the 2012 consolidation took place was she the Chairman?

Latha: She was the MD, but she was not the Chairman on the credit committee we understand.

A: Kamath was the Chairman of the credit committee. I really would not know the dynamics at that particular point of time. However, frankly I think you can demand a high level of integrity and high level of propriety from anybody, in a sense you can refrain from doing a transaction, but I think I would leave that issue aside because I see from the papers that CBI is going into the preliminary enquiry.

I want you to look at the transaction two parts. One is the ICICI Bank, ICICI Bank itself has confirmed they have not done anything wrong, they have only consolidated an exposure which was a performing loan for a period of five years, which has become non-performing and which will go into the insolvency. From what Videocon statement is concerned is that it might be able to – bank would be making the provisions, and for the bank is fully protected.

Now second is the propriety of Kochhar’s family in what way that is affected is the result of what should be disclosed and what should not be disclosed. At the moment I will not make any comment, except for the fact that there is I believe a preliminary enquiry which the CBI is doing. They will go into it. If the family had derived an economic advantage leveraging on the relationship with Videocon, certainly I suppose that is an issue which would cost me a lot of concern.

However, on the other hand, what has happened is that Videocon was in the process of investing and they have invested in Kochhar’s business. I do not think that I would demand from his wife, unless she is aware of, unless you are able to establish that she is aware of, that would mean that the husband and wife would have to be completely sharing all the information in respect of everything that happens between them.

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Govt pushes nationalised banks to find own funding after 2.11 lakh crore bailout

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A massive $32 billion (2.11 lakh crore) bailout package for India’s dominant state-run banks will not happen again and lenders will have to find their own funding by selling non-core assets and merging with each other, a senior government official said on Monday.

Last October, the finance ministry announced a state-bank rescue plan worth 2.11 trillion rupees ($32.41 billion) – $14 billion of which it is in the process of injecting as a first tranche – to help banks set aside enough for their bad loans and boost credit growth in an economy where banks are the main source of funding.

“My message is no more recapitalization. Whatever has happened, has happened. Clean up on your own,” the official who oversees the state banking sector told Reuters.

“We brought you out of the intensive care unit (ICU). Now, if you again go back to the ICU, and we keep bringing you out, that’s not how it’s done,” said the official, declining to be named.

“You either shrink or find some synergy,” the official said.

Recent rule changes by the Reserve Bank of India that did away with existing loan-restructuring schemes and aims to steer more defaulting companies into the bankruptcy courts could mean non-performing loans in state-run banks could rise from nearly 8 trillion rupees now, the official said, although he added 10 trillion rupees would be the upper limit for any such increase.

To avert situations like the massive $2 billion fraud in state-run Punjab National Bank that stunned the financial sector, the government is asking banks to constantly monitor loans above 2.5 billion rupees and report at their board meetings every quarter, the official said.

The government is also working to ease the country’s fledgling bankruptcy laws to help speed up the resolution process, the official said.

One of the proposals is to allow a resolution process to go ahead if 66 percent of the creditors vote for it, compared with the current requirement of a minimum of 75 percent.

“We are facing some resistance here from the promoters,” the official said, referring to the main backers of companies.

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ICICI Bank, Axis Bank together lose Rs 13,216 crore in market capitalisation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of ICICI Bank and Axis Bank declined up to 6% on Monday and their total market capitalisation eroded by Rs 13,215.67 crore, amid reports raising concerns about the two lenders.

ICICI Bank’s scrip tumbled 5.93% to end at Rs 261.90 on the BSE. In intra-day trade, it tanked 7% to Rs 258.90.

Led by the sharp fall in the stock, the company’s market valuation eroded by Rs 10,452.84 crore to Rs 1,68,344.16 crore on the BSE.

The shares of the lender took a beating amid controversy following reports about alleged involvement of Kochhar and her family members in a loan provided to Videocon Group on quid pro quo basis.

Markets regulator Sebi is looking into the matter for any possible disclosure and corporate governance-related lapses.

The CBI has questioned a few officials of ICICI Bank as part of a preliminary enquiry to find out if any quid pro quo was involved in the bank giving Rs 3,250 crore loan to the Videocon Group in 2012.

Shares of Axis Bank fell by 2.20% to settle at Rs 498.20 on the BSE. During the day, it lost 3.31% to Rs 492.50. The company’s market capitalisation dropped by Rs 2,762.83 crore to Rs 1,27,853.17 crore.

The decline came amid reports that the RBI has asked the company’s board to re-consider the decision to re-appoint Shikha Sharma as its MD and CEO for a fourth term in the wake of concerns over rising bad loans at the country’s third largest private sector lender.

“We wish to inform you that the bank’s board follows a standard process with regard to senior appointments, and forwards its recommendations to the regulator (to the extent required). This process is currently in progress,” Axis Bank said in a statement today.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow