Amid turmoil over the probe into CEO Chanda Kochhar and the conflict of interest controversy, ICICI Bank is deciding its next chairman today. While reports indicate that a former frontrunner in the race may have lost out, the embattled bank's board is looking at drafting in a seasoned ex-bureaucrat from the Indian Administrative service.
The board will finalise a name in its Friday board meeting as Chairman RK Sharma's term is ending on June 30. The selected person's name will be then sent to the Reserve Bank of India. Sharma has gone on record expressing his desire not to continue as chairman.
For a time, it was a foregone conclusion that former Bank of Baroda Chairman and Managing Director MD Mallya would step in to lead the country's largest lender from the private sector. However, after the CBI questioned Mallya over alleged Rs 2,919-crore loan fraud by Rotomac, his chances declined.
Mallya's appointment to the board of ICICI Bank as an independent director on May 29 was seen as a precursor to his move to the chairmanship.
In the changed scenario, where the bank is in uneasy limelight over Kochhar's role in the Rs 3250 crore loan to Videocon Industries in 2012, the bank is looking to bolster its top level with a seasoned bureaucrat, the Business standard reported on Friday.
"The board is of the view that the bank needs a seasoned bureaucrat from the Indian Administrative Service (IAS) who is methodological, has a good grasp over economy-related issues, and had served in a senior position in the Ministry of Finance," Business Standard quoted a source as saying.
The names that have been apparently vetted by the bank's board of the position of chairman include former revenue secretary Shaktikanta Das, former financial services secretary D K Mittal, former corporate affairs secretary Tapan Ray and former chairman of the Securities and Exchange Board of India (Sebi C B Bhave.
The board's preference for a top level ex-government official is underlined by its determination to shake off the "reputational risk" that emanated from the recent controversies, the source said.
The troubles for Kochhar and ICICI Bank had started when a whistleblower revealed irregularities and conflict of interest over the sanctioning of a huge loan to the Videocon Industries in 2012. The Rs 3,250 crore loan to the group was sanctioned under Kochhar's watch. However, the whistleblower complaint said that a few months before that loan was sanctioned, Videocon chairman Venugopal Dhoot had lent a whopping Rs 66 core to Deepak Kochhar, the CEO's husband.
Before the whistleblower complaint emerged, investor Arvind Gupta had alleged in 2016 that the loans to Videocon were a clear case of conflict of interest. He had said that the funding of a company called NuPower jointly by Dhoot and Deepak Kochhar pointed to the possibility of there being a quid pro quo behind the sanction of loans.
