ICBC Mumbai Branch Suspended $185M During Doklam
According to a confidential report, the actions taken by the Industrial and Commercial Bank of China (ICBC) during the Doklam border issue between India and China have been revealed. The report states that the Mumbai branch of ICBC suspended loans and bond investments worth $185 million. It is as it cooperated with Chinese political representatives throughout the conflict. This news attracted attention in the business world. It is because it has a significant impact on the present geopolitical and economic situation.
Confidential Report Indicates Connection between Doklam Events and ICBC’s Actions in India
The information has been obtained as a result of a worldwide investigation called China Capital. It is prepared by the International Consortium of Investigative Journalists (ICIJ) in cooperation with various media companies.
The internal report gives the work summary that is 178 pages long and dated back to January 2018. It describes that the only ICBC branch in India was operating in normal conditions. Even though it had to deal with several “internal and external challenges” during the Doklam conflict.
According to the report, the Mumbai branch stopped issuing 11 loans and bond investments for a total of $185 million. This had been authorized earlier so as to cope with the risks of operating.
Reasons Behind the Reduction of Financial Exposure at the Mumbai Branch
The internal report indicates that the bank actively reduced credit and investment risks due to the border conflict between India and China.
ICBC estimated that ending the operations had some consequences on its operational revenues. Namely a loss of approximately $6.36 million and an achievement of only 57.7% of the annual profit goal set by the bank’s headquarters.
The documents also refer to the contingency planning for risk management due to the diplomatic stalemate.
Supposed Cooperation with the Chinese Embassy and Consulate
One of the main points made in the document is that ICBC made arrangements for the members of the Communist Party of China in its Mumbai office. This was to stay on their posts and ensure contact with the Chinese embassy and consulate in India.
As stated, the objective of such operations was to keep the company functioning normally during the period when border tensions arose.
ICBC has not commented on the data made public by ICIJ and media partners.
What is being investigated due to China’s capital?
The investigation due to China’s capital is based on 4.8 million top-secret documents allegedly belonging to the ICBC London office for two decades. The documents include confidential reports, files, schedules for meetings and other clients of the company.
The investigation studied how one of the state-owned banks of China operates internationally. Also, how it is connected to the economic as well as political strategy of China.
Why Is This Significant for India-China Trade Relations?
The Doklam standoff lasted for 73 days in 2017 at the India-Bhutan-China tri-point. This was one of the biggest military confrontations between the two countries in recent times.
The new documents that were recently published show that the geopolitical tensions also influenced the financial decisions made by a significant Chinese bank operating in India.
For those who follow latest news on business, these revelations show how geopolitical tensions can influence the banking industry, investment decisions and risk management in finance.
Note: The conclusions of this report are based on confidential documents studied by the ICIJ and its media partners. ICBC has not issued any public comments concerning the accusations mentioned above.
