Chanda’s decline and fall

The arrest of the disgraced former MD and CEO of ICICI Bank, Chanda Kochhar, and her husband Deepak Kochhar by the CBI is the final nail in her career’s coffin. Trouble began for the then star of private sector banking in 2018 when she was forced to step down from the top post following allegations of corruption and other misdeeds by a whistleblower. In a quid pro quo, she had reportedly received undue benefits/illegal gratification through her husband’s company, which had a series of opaque deals with Videocon Group head Venugopal Dhoot after the group received loans for Rs 3,250 crore from ICICI Bank in 2009-12. Her professional integrity came further under a cloud as most of these loans eventually proved to be non-performing assets, causing a loss of Rs 1,730 crore to the bank.

Even as Chanda faces charges of conflict of interest, the besmirching is also a reflection on the governance of banking in our country, especially related to fiduciary duties and scrutiny in loan disbursals. If her rise from the position of a management trainee in 1984 to the corner office in 2009 was contiguous with the increasing faith of people in private sector banks as compared to the public sector ones, her ignominious exit is a pointer to the standards of probity in these institutions to which people entrust their life’s earnings and savings. That Chanda initially had the backing of the bank’s board raises suspicions about the regulators’ role and possible complicity of the stakeholders involved, including government agencies. The likes of Vijay Mallya, Nirav Modi and Mehul Choksi manifest this widespread malaise.

Chanda is also facing an investigation by SEBI, the income tax authorities and ED. Her shocking misconduct may cost her retirement benefits, bonuses and shares she has received over the years. She may even — rightly — face the ultimate humiliation of being stripped of her Padma Bhushan. But more importantly, the murky shadow the Chanda case has cast over corporate governance and the carefully crafted ‘clean and efficient’ image of private sector banks must lead to course correction. A larger clean-up is needed to secure the system and make it trustworthy.