You are here: Home » Finance » News » Banks
Business Standard

RBI to decide on Chanda Kochhar's term at ICICI Bank as CEO: FinMin sources

There are allegations of nepotism against Kochhar putting a question mark on the bank's corporate governance

Press Trust of India  |  New Delhi 

Chanda, Kochhar, Chanda Kochhar, ICICI
M D & CEO, ICICI Bank Chanda Kochhar

The Ministry is of the view that it is not their role to look into the affairs of but the as a regulator could look at allegations heaped against the bank's Chanda Kochhar, official sources said.

It is for the to decide if Kochhar should continue to be the and Managing Director of the bank, sources said, adding the regulator or board is competent to take a decision on continuation of the in the office.

There are allegations of nepotism against Kochhar putting a question mark on the bank's corporate governance.

According to the reports, Kochhar's husband had formed a joint venture with Videocon promoter Venugopal Dhoot for a business dealing in and there were a string of transactions later, which gave him full control of the venture after the exit of Dhoot.

Late last month, the admitted that Kochhar did not recuse herself from a credit committee meeting which decided to give a Rs 32.5 billion loan to diversified in 2012.

The has initiated a preliminary enquiry into the matter to check any wrongdoing, while other agencies, including the (ED), are also investigating the case.

However, the bank's board has stood firmly behind Chanda Kochhar, saying no wrong was committed by her, and the committee was headed by the bank's then K V Kamath.

There are reports that a section of the bank's board is against the idea of continuing in her role.

Global ratings agency on Monday said it is doubtful about the strength of corporate governance at

The ratings agency said allegations against ICICI Bank are coming against a backdrop of high non-performing assets in the sector, some of which have been linked to fraudulent lending.

It warned that regulatory sanctions are also possible, depending on the outcome of investigations by the law enforcement agencies and there is also a risk of financial penalties and legal action.

The ongoing investigations will undermine investor confidence in the bank, and have potential implications for funding costs and liquidity in an extreme scenario, it warned, conceding that as a systemically important entity, the state will chip-in with support.

First Published: Mon, April 09 2018. 22:38 IST