NEW DELHI: Even as the government has ruled out taking sides in deciding the fate of ICICI Bank MD & CEO Chanda Kochhar, the Life Insurance Corporation of India, which holds 9.4 per cent stake in the bank, as well as the government’s nominee is gearing up to mount pressure on the board.
While the board initially rejected allegations of quid-pro-quo by Kochhar in the Rs 3,250-crore loan given to Videocon Group, it is now reportedly split down the middle on the fate of the celebrated banker.
“The next meeting may seal Kochhar’s fate. A majority of the board members still have faith in her but the mood is changing,” a highly placed source told TNIE.
After ruling out a direct interference in deciding the fate of Chanda Kochhar, MD and CEO of ICICI Bank which is mired in a credibility crisis, the government is likely to use its nominated director and Life Insurance Corporation (LIC) to build pressure on the Board, which remains divided over the fate of the bank’s top brass.
Pressure has already started mounting on Kochhar to step down, as her name figured in the alleged controversy over the loan given to Videocon Group, which later turned into a Non-Performing Asset (NPA). The ICICI Board had come in strong support of Kocchar.
However, according to sources, as the investigation is progressing, it remains divided over Kochhar’s fate and will take up the issue in its next meeting. Kochhar’s current tenure will end on March 31, 2019.
“The next meeting is likely to seal the fate of Chanda Kocchar.
A majority of the Board members still have faith in her, but the mood is changing now. In that case, LIC Chairman V K Sharma and government nominee on the Board Lokesh Ranjan will play a crucial role to build the pressure.
The last-minute change in nominee by the government is not without a reason,” a senior management told The New Indian Express. Currently, LIC holds about a 9.4 per cent stake in ICICI Bank and can raise some difficult questions before the Board members.
The government, on April 5, changed its nominee on the Board of the ICICI Bank and appointed Ranjan, Joint Secretary in the Department of Financial Services, in the Board of Directors in place of Amit Agrawal. On March 28, the Board meeting both V K Sharma and Amit Agarwal had skipped the meet.
Meanwhile, the Union Finance Ministry ruled out any direct interference over curtailing the tenure of Chanda Kochhar.
“We are monitoring the case, but it is up to the Reserve Bank of India and most suitably, the bank’s Board to decide it,” said a senior official in the Department of Financial Service. Pressure is also mounting as institutional investors are raising concerns over the reputation of the bank.