Chanda Kochhar, facing a probe for charges of wrongdoing in giving loans, has quit as managing director (MD) and chief executive officer (CEO) of ICICI Bank, after heading the private lender for nearly a decade.
ICICI Bank has appointed Sandeep Bakhshi MD and CEO for a five-year term.
The market took the development positively as the bank’s stock gained 4.07 per cent over the previous close, while the Sensex declined 2.24 per cent.
Kochhar has been on long leave to facilitate the independent investigation, which is being conducted by former Supreme Court judge B N Srikrishna. “The board of directors of ICICI Bank accepted the request of Chanda Kochhar to seek early retirement from the bank at the earliest,” said the private lender in a filing to stock exchanges.
“The enquiry instituted by the board will remain unaffected by this and certain benefits will be subject to the outcome,” the bank said in a statement after a board meeting.
The board also accepted the resignation of another member, M D Mallya, who has quit on health grounds.
The appointment of Bakhshi is subject to regulatory and other approvals. Bakhshi joined the bank as chief operating officer in June, after Kochhar went on leave and was also interim CEO. Before this, Bakhshi headed its life insurance subsidiary, ICICI Prudential Life Insurance.
Kochhar’s current term would have ended in March 2019. “It was clear cut that she (Kochhar) had to go. It was a question of when,” said J N Gupta, MD, Stakeholders Empowerment Services.
Kochhar was under investigation for conflict of interest in sanctioning loans to the Videocon group, which had business relations with NuPower Renewables, owned by her husband Deepak Kochhar.
The bank said Kochhar would also relinquish her board position in the bank’s subsidiaries. Kochhar was reappointed on the board of ICICI Securities in August 2018 with 97.7 per cent votes.
Industry experts said Kochhar’s resignation was positive, as it has put an end to the uncertainty over succession at the bank.
N Vaghul, former chairman of ICICI Bank, said, “I know both of them (Chanda Kochhar and Sandeep Bakhshi). They are excellent leaders. Chanda has done her job. It is sad she is going in the backdrop of a controversy.”
“Sandeep has shown leadership capabilities in insurance and has already proved executive capabilities at the bank,” added Vaghul.
“Kochhar’s resignation and the outcome of the investigation are two separate things. Kochhar, in her wisdom, has resigned, but we don’t know if the investigation will hold her guilty or give her a clean chit,” said Gupta.
ICICI Bank is not the only private bank that has seen a shift in its top management this year.
Axis Bank’s MD and CEO Shikha Sharma withdrew her reappointment after the central bank told the board to reconsider granting her a three-year term.
YES Bank’s MD and CEO Rana Kapoor’s re-appointment was cut short by the Reserve Bank of India. While YES Bank is looking for a successor, Amitabh Chaudhry will take over as Axis Bank’s MD and CEO in January 2019.
IDFC Bank’s MD and CEO Rajiv Lall will soon hand over the reins to V Vaidyanthan after the merger with Capital First.