(Adds Caixabank, Sabadell reactions, claims before ICO, background) MADRID, June 16 (Reuters) - Spain’s competition watchdog is investigating possible anti-competitive practices by Banco Sabadell, Santander, Caixabank and Bankia in the marketing of state-backed coronavirus loans. The CNMC said in a statement on Wednesday that it had opened disciplinary proceedings against the banks over alleged irregularities involving state-backed credit lines to help companies and households through the COVID crisis. Its action opens a maximum period of 18 months for the investigation and resolution of the case. The government last year approved up to 100 billion euros ($121 billion) in so-called ICO liquidity lines, where Spain guaranteed up to 80% of the loans. These were channelled through banks to small and mid-sized companies and the self-employed. The CNMC said it was investigating whether banks had required customers to buy financial products as a precondition to receiving these loans. Santander said it had complied with regulations governing the ICO loans and that it had not made ICO-guaranteed financing contingent on any product or service. Sabadell said it would provide all the evidence to prove its proper conduct. Caixabank, which as of the end of March closed the acquisition of Bankia, said it expected no sanctions from the CNMC after providing additional information on the subject. After complaints from companies and self-employed people, the Spanish government specifically banned banks in April 2020 from making the loans conditional on other services or products. As of the end of 2020, Spanish state credit agency ICO had received around 900 claims against the marketing relating to state loans, which represented 0.1% of the almost 950,000 deals it had approved, a source with knowledge of the matter said. The CNMC said it was also analysing whether loans were used to restructure pre-existing financial debts. This would constitute a breach of the purpose of the credit lines, as the support was conditional on addressing liquidity needs directly linked to the impact of the pandemic. “The actions of the banks under investigation differ from the good faith required in their relations with customers,” the CNMC said Their practices could have altered the economic behaviour of consumers who turned to the banks for ICO loans, it said, adding that this could have distorted free competition and affected the public interest. ($1 = 0.8245 euros) (Reporting by Jesús Aguado; Editing by Jan Harvey and Alexander Smith) Our Standards: The Thomson Reuters Trust Principles.