ICICI Bank restarts warehouse financing

Mumbai: ICICI Bank has restarted financing against warehouse receipts after blocking the gaps in risk management practices. In 2006, the bank was cheated of Rs 200 crore at central and state government warehouses in Kolhapur district, where it had not engaged any third-party collateral managers. The private sector bank has now named collateral managers even for government-owned warehouses as it does for warehouses owned or managed by private companies. The parties who made lesser quantities of commodities than mentioned in the warehouse receipts orchestrated the fraud. They have stiffened the collateral management. In the last four months, they did not take up any new (warehouse receipt financing) business. In a filling to the Securities and Exchange Commission for the $2.5-billion American Depository Receipts (ADR) issue, the bank said: During the course of a review, irregularities, including absence of the needed quantities of commodities in warehouses, were observed. ICICI Bank names third party management and collection agents to market warehouse receipt financing.