Shares of ICICI Bank Ltd plunged nearly 5 percent to a five-month low on Monday after the Central Bureau of Investigation (CBI) launched a preliminary investigation to assess whether there was any wrongdoing in the bank’s lending practices.
Sentiment was also negative after the central bank fined the country’s largest private-sector lender 589 million rupees ($9.05 million) for not sticking to certain rules about sale of government securities.
ICICI Bank’s shares were down 4.4 percent at 266.1 rupees as of 0404 GMT after declining to 265.10 rupees, their lowest since late October.
The police launched a preliminary inquiry about two months ago into Deepak Kochhar, the husband of the bank’s CEO, Chanda Kochhar, and officials at ICICI Bank and Videocon Group, Reuters reported on Saturday, citing sources.
“While this fine will not have a material impact on earnings, it is negative on sentiment because other banks seem to have interpreted the rules correctly,” IDFC Securities analysts wrote in a note.
“We see pressure in the short term following the fine, allegations and CBI’s preliminary enquiry,” IDFC Securities adds.
Indian stock markets were closed on Thursday and Friday for holidays.(REUTERS)