MUMBAI: Axis and ICICI banks clarified their exposures to fraudulent loans were either nil or negligible, a day after investigating agencies issued summons to the two private sector lenders in the ongoing probe against diamond traders Nirav Modi and Mehul Choksi.In a disclosure to the bourses, ICICI said it has no exposure to the Modi group of companies, nor has it issued any Letter of Understand (LoU), nor has any buyer’s credit exposure against LoUs with respect to the Modi firms as well as the Choksi-led Gitanjali group.
However, ICICI is a part of the working capital lender consortium in the Gitanjali group of companies along with 30 other banks, which collectively lent about Rs 5,300 crore over several years.While ICICI didn’t disclose the actual amount, the private sector bank clarified the exposure is not the largest. Unconfirmed estimates indicate the figure to be around Rs 600 crore. It may be noted state-run Punjab National Bank has lent about Rs 1,700 crore to companies related to Modi and Choksi. On the other hand, Axis Bank’s exposure to both entities in question is about Rs 200 crore.
Shares of ICICI were battered for the sixth consecutive session, with the scrip plunging 3 per cent in early morning trade and touching an intra-day low of Rs 285.30. Similarly, shares of Axis Bank too fell 1.2 per cent to hit an intra-day low of Rs 510.55 of BSE on Wednesday. As part of its investigation, the Serious Fraud Investigation Office (SFIO), which comes under the Ministry of Corporate Affairs, is probing the senior management of several banks — both public and private.