ICICI Bank Falls After Central Bank Comment on Laundering Report
ICICI Bank Ltd. (ICICIBC), India’s second- largest lender by assets, is poised for the biggest daily fall in more than a year after the central bank said it’s “in touch” with banks named in a money-laundering news report.
ICICI’s shares dropped 4.2 percent to 1,064 rupees at 1:14 p.m. in Mumbai trading today, headed for the lowest close since Feb. 27 last year. The S&P BSE Bankex index, a gauge for the country’s banking stocks, fell 1.9 percent.
ICICI Bank, HDFC Bank Ltd. and Axis Bank Ltd. (AXSB) are running a nationwide “money laundering racket,” violating multiple rules including tax and banking regulations, news website Cobrapost reported after a sting operation. The Reserve Bank of India is “collecting information” on the report, Deputy Governor Urjit Patel told reporters in Mumbai yesterday.
ICICI and HDFC Bank (HDFCB) said yesterday that they are investigating the news report. The allegation comes as financial regulators and law enforcement agencies worldwide step up efforts to tackle fraud. HSBC Holdings Plc, Europe’s largest bank, in December agreed to pay $1.92 billion to settle a money- laundering case with regulators including the U.S. Department of Justice.
“The central bank official’s comment that it is collecting information on the money laundering report is reason for the fall,” said Hatim Broachwala, Mumbai-based banking analyst at Karvy Stock Broking Ltd. “The market is waiting for some clarity on the issue.”
HDFC shares fell 2.2 percent to 635 rupees, while Axis Bank fell 1.8 percent to 1,328 rupees in Mumbai.
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