When the economy tanked: Bank’s loan to Indian bank halved, regulator says
A leading American bank that has helped to build a $1 trillion trade deficit with India has had its loan to an Indian bank slashed by more than half because of the government’s “fiscal emergency.”
The American Bankers Association (ABA) said Wednesday that it will no longer issue any new commercial banking or consumer banking credit to ICICI Bank, the world’s second-biggest bank by assets.
It was one of three banks to cut their loans to ICI by more a quarter to a quarter-point, to about $1.3 billion, after the Indian government imposed a tax on goods and services imported from India earlier this month.
The tax took effect on Feb. 4.
It has been a challenge for ICICIs chief executive to balance the need to serve the global financial needs of Indian consumers with its business-friendly and progressive policies.
ICICICIs CEO Ajay Bhargava has been critical of the Indian tax, saying it was “an assault on the rule of law and on Indian culture.”
The Indian government has said it will continue to enforce the tax.