ICICI Bank (IBN) Plunges 0.23% as Regulatory Fines and Governance Scrutiny Drive 6.07% Weekly Drop

ICICI Bank (IBN) fell 0.23% on September 26, marking its seventh consecutive day of declines, with a cumulative drop of 6.07% over the past week. The stock hit its lowest level since April 2025, with an intraday decline of 0.59%, reflecting persistent pressure amid regulatory and governance challenges.

Regulatory scrutiny has intensified, with the Reserve Bank of India imposing a INR 75 lakh penalty in August 2025 for non-compliance with property valuation and current account guidelines. This follows a INR 97.8 lakh fine in May for cybersecurity and KYC violations, raising concerns over recurring compliance lapses and eroding investor confidence.

The bank’s decision to hike minimum balance requirements for new savings accounts in August sparked public backlash, with critics accusing it of undermining financial inclusion. While the RBI allows banks to set their own rules, the move has drawn scrutiny over customer retention and reputational risks, particularly in semi-urban and rural markets.

Legal challenges persist, as former CEO Chanda Kochhar remains embroiled in a 2025 appellate tribunal ruling that upheld her conviction in the Videocon loan fraud case. The case, involving a ₹64 crore bribe for a ₹300 crore loan, has cast a long shadow over the bank’s governance practices, complicating efforts to restore trust.

Despite these headwinds, ICICI Bank reported a 15.5% year-on-year profit rise in Q1FY26, driven by robust net interest income and loan growth. Strategic moves, including the delisting of its broking arm and a planned IPO for its asset management subsidiary, aim to streamline operations and raise capital. However, analysts remain cautious, with some upgrading ratings while others emphasize regulatory risks as a key constraint on long-term gains.