- On 4 October, Chanda Kochhar resigned as the CEO and Managing Director of ICICI Bank, India’s largest private sector bank.
- Kochhar has been embroiled in a conflict-of-interest scandal since March this year, and had been on leave since June pending the conclusion of an independent investigation into her dealings with Videocon.
- Sandeep Bakshi, who was made the COO after Kochhar went on leave, has been named as the bank’s new CEO and MD for a period of five years.
An illustrious career ended with a whimper on 4 October as Chanda Kochhar, the CEO and Managing Director of ICICI Bank, India’s largest private sector bank, hung up her boots. She also relinquished her position on the various boards of ICICI’s subsidiaries.
The resignation isn’t surprising. But it is significant, as it could be seen as an admission of guilt.
Kochhar has been embroiled in a conflict-of-interest scandal since March this year, and had been on leave since June pending the conclusion of an independent investigation into the matter. The inquiry, which is led by former Supreme Court Judge Justice BN Srikrishna, is looking into the extent that Kochhar’s dealings with Videocon constitute corruption and misconduct.
The story goes like this. As CEO, Kochhar sanctioned a ₹32.5 billion loan to Videocon Group in 2012. The loan was eventually declared non-performing in 2017 and to date, 86% of the principal amount remains unpaid. In 2008, the promoter of Videocon Group, Venugopal Dhoot, set up a multi-crore venture with Kochhar’s husband, Deepak, and two of her relatives called NuPower Renewables Pvt Ltd. Six months after receiving the loan from ICICI, Dhoot transferred his ownership in the company to a trust headed by Deepak Kochhar for a meagre amount.
Following Kochhar’s resignation, ICICI’s contingency plan has kicked into high-gear. Sandeep Bakshi, who was made the COO after Kochhar went on leave, has been named as the bank’s new CEO and MD for a period of five years.
The investigation into Kochhar’s dealings is still ongoing, and isn’t likely to end well. It marks a sad end for a woman credited with facilitating the evolution of India’s retail banking sector.
A high rise and hard landing
Kochhar joined ICICI Limited as a management trainee in 1984 and slowly worked her way up the ranks. The company witnessed tremendous change in the 1990s, shifting from a project financier to a diversified financial services firm. Shortly after the establishment of ICICI Bank in 1994, Kochhar began overseeing the lender’s infrastructure finance and corporate banking operations.
She then took over the ICICI’s international banking in the mid-2000s before being promoted to CFO and Joint Managing Director in 2007. In 2009, she was made the CEO and MD of the bank, becoming the first female and the youngest person ever to lead its operations, and in 2011, she was awarded the Padma Bhushan in recognition of her contributions to the banking landscape.
Kochhar’s resignation is also a lasting contribution of sorts. It will likely set a precedent for better governance, compliance and oversight at India’s banks as regulators like the RBI look to clamp down on instances of fraud and corruption.