SBI and ICICI Bank investors pay the price for the nearly ₹10,000 crore lost to the biggest bank fraud ever in India

• ABG Shipyard, one of the most prominent private sector shipyard companies in India, has allegedly defrauded banks of nearly ₹23,000 crore.
• Two systemically important banks, ICICI Bank and SBI, have an exposure of nearly 44%.
• Here’s a full list of banks with exposure to ABG Shipyard, and how their stocks have reacted to the news.

The ABG Shipyard fraud case could be the biggest bank fraud case in the history of India, with an exposure of ₹22,842 crore to a consortium of 28 banks led by the State Bank of India and ICICI Bank.

Of the total ₹22,842 crore exposure to ABG Shipyard, there are two domestic systemically important banks – otherwise known as ‘too big to fail’ – ICICI Bank and the state-run SBI.

Here’s how much exposure each bank has to ABG Shipyard:

Note: Share gain/loss as of 10:00 a.m., February 14

As per the FIR filed on SBI’s complaint, a forensic audit conducted by Ernst & Young revealed that from April 2012 to June 2017, loans given to the company were siphoned off and were also used to purchase assets for its related parties. The company allegedly also invested some of those loans in its overseas subsidiary.

The primary accused in the case are Rishi Kamlesh Agarwal, the company’s former chairman and managing director, Santhanam Muthaswamy, executive director and three other directors – Sushil Kumar Agarwal, Ashwini Kumar and Ravi Vimal Nevetia.

The matter surfaced after an audit conducted by EY pointed towards the alleged fraud. A 2019 complaint by SBI was returned by the CBI, seeking an internal investigation by the bank, including the details of fraud committed on other banks which are a part of the consortium.

SBI filed a fresh complaint in September 2020, informing the CBI that staff accountability had been dealt with and closed by the competent authority and it was found that its staff was not involved in the alleged fraud.
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