Directors of ICICI Bank, India’s largest private sector lender, feel they should await directions from the banking regulator in regard to their CEO Chanda Kochhar, who is facing charges of nepotism and conflict of interest.
Some ICICI directors feel they should wait for communication or a directive from the Reserve Bank of India before taking action against Kochhar, after the central bank helped to curtail the tenure of the controversial chief executive officer of Axis Bank Shikha Sharma.
Sharma recently announced that she would cut short her fourth term as CEO and managing director of Axis Management Co Ltd by leaving in December.
The directors at ICICI feel that in the absence of any regulatory intervention on the issue, there isn’t much for them to do on their own to reassure investors or depositors, Economic Times has reported.
The directors discuss developments regularly and would take a call on handling the issue if there were any developments, the daily said. The RBI has so far not given any directions to the ICICI Bank board regarding its CEO.
The Central Bureau of Investigation (CBI) is inquiring into allegations of corruption and nepotism related to loans given by ICICI Bank to the Videocon Group, a consumer electronics and oil and gas exploration company, which Chanda’s husband Deepak Kochhar had a business partnership with.
The investigating agency has also questioned Chanda’s brother-in-law Rajiv Kochhar for alleged conflict of interest after it emerged that Kochhar’s Avista Advisory also advised clients of ICICI Bank.
India’s banking industry has been rocked by one scam after another in recent months. First, there was the infamous Punjab National Bank scam in February involving a fraud of around US$2 billion – the biggest scam in India’s banking industry. This was followed by allegations involving the ICICI Bank chief and the RBI advice against extending the Axis Bank boss’s term.