ICICI Bank used term loans, LCs to help borrowers avoid loan defaults: Report

The complaint, written by an anonymous ICICI Bank employee to the Reserve Bank of India (RBI), also lists 31 borrowers whose term loans had been sanctioned by the bank, Mint reports.

These loans were given despite warnings by internal auditors, the report adds.

Essar Global, Bhushan Steel, NCML Industries, Bhatia Global, Bhushan Energy, Essar Steel and Tecpro Systems are some of the companies named in the complaint.

The bank issued LCs against fictitious bills to help with a number of loans, the whistleblower has alleged.

Moneycontrol could not independently verify the news.

ICICI issued a response to Mint's query.

"Banks are required to disclose the divergences in asset classification and provisioning consequent to RBI's annual supervisory process in their notes to accounts to the financial statements, wherever either (a) the additional provisioning requirements assessed by RBI exceed 15% of the published net profits after tax for the reference period or (b) the additional Gross NPAs identified by RBI exceed 15% of the published incremental Gross NPAs for the reference period, or both. Based on the above, no disclosure on divergence in asset classification and provisioning for NPAs was required to be made by the Bank with respect to RBI's annual supervisory process for FY2017."

ICICI Bank has waived penal interest of borrowers in the past to avert impairment, two bank officials told Mint.

"Whenever a loan account was overdue for over 60 or 90 days, a fresh loan was sanctioned. To disburse the fresh loan after sanction, the overdue was needed to be regularized. In one case, for an initial term loan of Rs  100 crore, three loans aggregating to Rs 90 crore were sanctioned to avert impairment over a five-year period," the officials told the paper.