MADRID, June 16 (Reuters) - Spain’s competition watchdog CNMC said on Wednesday it was investigating possible anti-competitive practices in the marketing of state-backed loans by lenders Banco Sabadell, Santander, Caixabank and Bankia. The CNMC said it had opened disciplinary proceedings against the banks over alleged irregularities involving state-backed credit lines to help companies and households cope with the impact of COVID-19. This now opens a maximum period of 18 months for the investigation and resolution of the case by the CNMC. The Spanish government approved last year up to 100 billion euros ($121.3 billion) in so-called ICO liquidity lines, where the state guaranteed up to 80% of the loans. They were channelled through banks mainly 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 receive these loans. Sabadell and Caixabank, which as of end March legally closed the acquisition of Bankia, declined to comment. 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. It said it was awaiting further information on the details of the investigation. The CNMC said it was also analysing whether loans were used to restructure pre-existing financial debts, it said. This would constitute a breach of the purpose of those credit lines, as the support was conditioned on addressing liquidity needs directly linked to the impact of the pandemic. “Following the analysis carried out, the CNMC considers that the actions of the banks under investigation differ from the good faith required in their relations with customers,” it said. As a result, their practices could have altered the economic behaviour of consumers who turned to these institutions to take out 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 Our Standards: The Thomson Reuters Trust Principles.