ICICI Bank on Friday said a whistle-blower had in March alleged irregularities in 31 borrower accounts, which had led to incorrect classification of assets, accounting of interest income and NPA recoveries as fees, and over-valuation of security for corporate loans.
The private sector lender said the position in respect of the 31 loan accounts, as on March 31, 2018, was that the loans outstanding were classified as non-performing, with provisions made as per applicable norms.
“These accounts were classified as non-performing between the year ended March 31, 2012 (FY2012) and the year ended March 31, 2017 (FY2017), other than two accounts which were classified by December 31, 2017,” the bank said in a notice to the bourses.
“Thus, all these loans had been classified as non-performing prior to the bank becoming aware of the complaint. The aggregate loans (gross of prudential/ technical write-offs) outstanding at March 31, 2018 were ₹60.82 billion ($898 million), about 1.1 per cent of gross of gross loans,” the notice said.
The provision coverage, including prudential/ technical write-offs, was 50 per cent.
The bank said that based on the procedures performed in the enquiry (by the head of the Internal Audit Group under the supervision of the Audit Committee), the allegations relating to incorrect accounting of interest income and NPA recoveries as fees, and over-valuation of security for corporate loans, were not borne out.
“In certain accounts, transactions were observed that may have delayed the classification of the account as non-performing under Indian GAAP in earlier years. As mentioned earlier, all the above loans had been classified as non-performing and provided for as per applicable norms by December 31, 2017 itself,” the bank said.
The notice said statutory auditors were provided periodic updates and their inputs factored in to the enquiry process.
“The interim report of the enquiry was reviewed in detail by the Audit Committee and statutory auditors, prior to finalisation of the accounts for the year ended March 31, 2018 (FY2018).
“The findings in the interim report had no material impact on the financial statements for FY2018. The interim report has also been submitted to the regulator,” the bank said.