The board of ICICI Bank on Wednesday defended its management after a review of the bank’s internal processes for credit approval in general and its exposure to the Videocon group in particular, saying it “expresses and reposes full faith and confidence” in managing director and chief executive officer Chanda Kochhar. The statement is important in the light of recent reports that ICICI Bank’s lending to some of its clients may not have been prudential. The board observed that the process of credit approval at the bank is such that no individual employee would be in a position to influence credit decisions there. Multiple independent departments are involved in providing independent credit risk rating, doing credit appraisal, credit approvals and monitoring the proposals.

The bank’s credit approval authorisation framework is laid down by the board. In its statement, the board said, “The larger exposures are approved by the credit committee of the board.” “The majority of credit committee members are independent directors of the bank. The chairman of the credit committee, till as late as June 2015, was always a non-executive director. Based on the above, it can be concluded that there are adequate checks and balances in loan appraisal, rating and approval processes within the bank, both from the control as well as from a governance perspective,” the statement said.

With respect to the bank’s exposure to the Videocon group, the board said ICICI Bank extended loans in 2012 as part of a consortium of over 20 banks and financial institutions. “ICICI Bank was not the lead bank for this consortium and the bank only sanctioned its share of facilities aggregating approximately Rs 3,250 crore which was less than 10% of the total consortium facility in April 2012,” the board said. The credit committee of the bank that sanctioned the advances was chaired in 2012 by the then chairman of ICICI Bank and included independent and working directors of the bank. “It is important to note that Ms Chanda Kochhar was not the chairperson of this committee,” the board observed, concluding thus that there was “no question or scope of any favouritism, nepotism or quid-pro-quo”. The bank further clarified that none of the investors of NuPower Renewables are borrowers of ICICI Bank.