Shares of ICICI Bank Ltd plunged nearly 5 percent to a five-month low on Monday after the Central Bureau of Investigation (CBI) launched a preliminary investigation to assess whether there was any wrongdoing in the bank`s lending practices.
Sentiment was also negative after the central bank fined the country`s largest private-sector lender 589 million rupees ($9.05 million) for not sticking to certain rules about sale of government securities.
ICICI Bank`s shares were down 4.4 percent at 266.1 rupees as of 0404 GMT after declining to 265.10 rupees, their lowest since late October.
The police launched a preliminary inquiry about two months ago into Deepak Kochhar, the husband of the bank`s CEO, Chanda Kochhar, and officials at ICICI Bank and Videocon Group, Reuters reported on Saturday, citing sources.
"While this fine will not have a material impact on earnings, it is negative on sentiment because other banks seem to have interpreted the rules correctly," IDFC Securities analysts wrote in a note.
"We see pressure in the short term following the fine, allegations and CBI`s preliminary enquiry," IDFC Securities adds.
Indian stock markets were closed on Thursday and Friday for holidays.