ICICI-Videocon loan case: Adopt ‘best practices’ Chanda Kochhar, and quit

Allahabad Bank CEO & MD Usha Ananthasubramanian has been shorn off her executive powers but the big question is why has Chanda Kochhar, MD & CEO of ICICI Bank, being left off the hook?

Published: 19th May 2018 11:25 PM  |   Last Updated: 20th May 2018 04:46 AM   |  A+A-

ICICI Bank Chief Chanda Kochhar

Express News Service

In recent days, Allahabad Bank CEO & MD Usha Ananthasubramanian has been shorn off her executive powers following a directive of the Finance Ministry. This comes close on the heels of a CBI charge sheet in the Nirav Modi case, which had named her as an accused. She had not complied with RBI standards for advancing loans when she was Punjab National Bank’s (PNB) MD & CEO, the charge sheet says. This will hopefully contribute to cleaning up the banking system, but the big public question is why has Chanda Kochhar, MD & CEO of ICICI Bank, being left off the hook? Why has she not put in her papers yet? Are there different standards for different scams?  


A quick recap of the conflict of interest issue at ICICI Bank: In 2012, ICICI Bank had advanced a loan of Rs 3,250 crore to Videocon, 86 per cent of which remains unpaid today and has been declared a non-performing asset (NPA). Six months before that loan was given, Venugopal Dhoot, chairman of Videocon, had lent the ICICI Bank’s chief’s husband, Deepak Kochhar, Rs 64 crore to develop a solar power business. He then inexplicably transferred the lending entity to Mr Kochhar later for just Rs 9 lakh. Is the CBI probing if there was a quid pro quo between the two transactions?

Bungling and corruption has brought the Indian banking system to its knees. The public credibility of bankers and banks has never been lower. Last week, after PNB reported a fourth quarter loss of Rs 13,400 crore, the bank scrip tanked 12 per cent. ICICI Bank too reported a drop of nearly 45 per cent in the consolidated net profit to Rs 1,142 crore for the quarter.

Bad performance and plunging credibility has eroded values in the banking sector as never before. Over the last six months, the government and the public have lost some Rs 1.29 lakh crore in wealth held as equity in banks. In the same period, the publicly listed state-owned banks have seen their stock prices fall between 16 to 60 per cent.

In this climate, those of doubtful integrity, even if yet to be proven, should be cast aside. The ICICI Board has backed Chanda Kochhar, and publicly stated that they had found no wrong doing. Legally, there is nothing proven against husband Deepak Kochhar yet, it is argued. These arguments will not wash. When there is an obvious conflict of interest and the bank has lost money in the loan transaction, the best practice is to step aside, even if the matter is still being investigated.


Around the same time the ICICI Bank crisis came to the fore, Martin Sorrell, Chairman and CEO of the world’s largest advertising company WPP, put in his papers in London after lawyers of the company launched an investigation into possible personal misconduct by the boss.  The fact that Sorrell had built the company from scratch over 33 years to a make it a $21 billion Goliath did not matter.

In another case, Save the Children international chair Alan Parker resigned after Britain’s Charity Commission opened a statutory inquiry into the handling of complaints of sexual harassment of staff by directors at the charity’s British arm.

The ICICI Bank board has probably worked out a deal to save face. Kochhar is in her second five-year term, which ends on March 31 next year; she may be allowed to complete her term with no bids to be allowed for another extension. This deal is not acceptable. Here we have the head of the second largest private bank virtually in hiding. Deepak Kochhar is being investigated by both CBI and the income tax department. In this scenario, keeping pretences will further damage the bank. It is not legality but good Corporate Governance that should be in command now.

What are the RBI and the Finance Ministry doing? It almost seems the government is waiting for the crisis to blow over. UTI, LIC and some other government bodies between them hold nearly 30 per cent equity in the bank. Except some postures like the LIC nominee on the Board not attending a Board meeting, precious little has been done to nudge Mrs Kochhar to put in her papers. How can the RBI and the Finance Ministry lecture state-owned banks on cleaning up, while tolerating unethical practices at ICICI Bank?

It is time the double talk ended, and Chanda Kochar quits.

  • Rs 3,250 crore advanced by ICICI Bank to Videocon in 2012
  • 86% of the loan amount remains unpaid till date

Face-saving bid

Chanda Kochhar is in her second five-year term, which ends on March 31 next year; she may be allowed to complete her term.


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  • Varsha Chauhan

    Loan given to Videocon is by consortium of banks, Not individually by ICICI bank. so as per your deductions Chanda Kochar must have also convinced others banks to take part? right? And whatever Management of ICICI bank did was right because they found Chanda Kochar Not guilty.
    4 years ago reply
  • Chaitali

    Chanda Kochhar - Fraudster and Theif
    4 years ago reply
  • Vikita

    You south Indians " Chanda Kochhar " are so very distinguishing that you have spotlit the name of your entire community
    4 years ago reply
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