Whether or not ICICI CEO and Managing Director Chanda Kochhar, who is facing allegations of nepotism, should continue at the post , It is for the Reserve Bank or ICICI Bank board to eventually decide the issue
According to various media reports, the Finance Ministry is of the view that it is not their role to look into the affairs of private lender ICICI Bank but the RBI as a regulator could look at allegations heaped against Kochhar, sources in the Finance Ministry said. It is for the RBI to decide if Kochhar should continue to be the CEO and Managing Director of the bank, they said, adding the regulator or ICICI Bank board is competent to take a decision on continuation of the incumbent CEO 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 Deepak Kochhar had formed a joint venture with Videocon promoter Venugopal Dhoot for a business dealing in renewable energy 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 bank admitted that Kochhar did not recuse herself from a credit committee meeting which decided to give a Rs 3,250 crore loan to diversified Videocon Group in 2012. The Central Bureau of Investigation has initiated a preliminary enquiry into the matter to check any wrongdoing, while other agencies, including the Enforcement Directorate (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 chief K V Kamath. There are reports that a section of the bank’s board is against the idea of Chanda Kochhar continuing in her role.