Chanda Kochhar arrest sparks more questions, less answers
Economic offences may not be violent crimes, but in the long run, they have a more serious debilitating effect on the economy. In this context, bringing to book Chanda Kochhar, former MD & CEO of ICICI Bank, her husband Deepak Kochhar, and Venugopal Dhoot, chairman of the Videocon Group, for defrauding the bank must be supported.
The Central Bureau of Investigation (CBI) has arrested the trio for loan sanctions of Rs 3,250 crore from the ICICI Bank to the Videocon Group in violation of the Banking Regulation Act and the credit policy of the bank. As quid pro quo, Venugopal Dhoot transferred Rs 64 crore to Deepak Kochhar’s startup, NuPower Renewables. What is intriguing, though, is the long time it took the CBI to get into the act. The agency had filed a chargesheet as far back as March 2018, and Kochhar was fired by the bank in January 2019. In the four years that have elapsed, the investigation, trial and sentencing should all have been over. We are, however, unfortunately still at the stage of preliminary investigation.
Moreover, what we have today is just the tip of the iceberg. For months after the scam blew, the ICICI Bank board continued to protect Chanda Kochhar and insisted there was no wrongdoing. Only after the internal investigation by Justice B N Srikrishna indicted Kochhar in January 2019 was the bank forced to acknowledge malfeasance, and she was formally terminated. Secondly, Kochhar was not the only person in the Credit Committee that sanctioned the suspect loans. Who else was responsible? The investigating agencies haven’t even begun looking!
At a broader level, the tardy and casual way we handle economic crimes is a matter of serious concern. During the past five financial years, scheduled commercial banks have written off Rs 10.09 lakh crore as bad debts. Writing off bad debts dresses up the non-performing assets (NPAs) portfolio, but it doesn’t take away from the fact that thousands of crores lent mainly by the public sector banks (PSBs) have vanished into the blue.
The banks have even identified who they call ‘willful defaulters’, but it hasn’t made recovery easier. Among those topping the list are Mehul Choksi (Rs 10,444 crore) and diamantaire Jatin
Mehta’s Winsome Diamonds (Rs 6,800 crore), who have disappeared overseas. The action against economic offenders must be quick and punishing. Currently, it is not a very strong message going out.