Former ICICI Bank CEO Chanda Kochhar and her husband Deepak Kochhar. (File Photo | Parveen Negi, EPS)
MUMBAI: An easy calm has descended over the banking sector after the arrest of former ICICI Bank CEO Chanda Kochhar and her husband Deepak Kochhar last week and then Venugopal Dhoot, Chairman of Videocon Group this week.
Bankers say arrests will nudge private sector bank officials to take more conservative approach and will dent their risk-taking mindset while approving loans. “Private bankers are known for their flexible approach and this has been one of the main factors behind the success of private banks in India. While public sector bankers follow a strict rule-book approach, private bankers use their discretion and take risks, along with sticking to the rules for approving loans. The arrest of these big names will hit the risk-taking mindset of bankers,” a senior official of a private bank told this newspaper.
“Bankers in the private sector will prefer to stick to tick-box approach in approving loans. However, the officials who work ethically have nothing to fear. The role of senior management becomes crucial at this juncture. They should support their colleagues to take risks and ensure that they adhere to the rules,” he added.
Chanda and Deepak Kochhar were arrested by Central Bureau of Investigation (CBI) on Friday night while Venugopal Dhoot,71, was arrested in the loan fraud case on Monday morning. These high-profile arrests have once again put spotlight on collusion between bankers and corporates to get high value loans for personal gains. Explaining current situation, a private bank official said nobody is discussing this news publicly in meeting rooms or office pantry.
“It’s a tricky situation at office as everyone wants to express his or her views about the arrests but nobody wants to be the first to initiate the discussion. You never know who will take it personal” a marketing official of a private bank told this newspaper.
“Although, it was the biggest news of the day, everybody shrugged it off. Publicly no one is saying anything but it is a hot topic in whispered conversations,” he said. This is not the first time banking industry is hit by scandals. Vijay Mallya owned Kingfisher Airlines owes over `10,000 crore to several banks. The government is trying to bring Mallya, who fled India in 2016, back from the UK. Punjab National Bank was hit by `11,400 crore scam involving jewellers Nirav Modi, Mehul Choksi and others.
