The Reserve Bank of India (RBI) today refused to comment on the corporate governance issues plaguing ICICI Bank whose MD and CEO Chanda Kochhar was asked to proceed on leave till an external enquiry into her alleged malafide actions favouring Videocon group and the companies of her husband Deepak Kochhar was completed.
Replying to a question whether the regulator is engaged with the bank and also if there is a bigger issue of governance at private sector banks, RBI’s deputy governor NS Vishwanathan said, “We are alive to what is happening in the banking system and we are dealing with those situations as they are emerging, but I cannot say what we are doing with a specific bank.”
“I think it is not appropriate for us to discuss any specific bank,” Vishwanathan, who is in-charge of the banking regulations department, said without naming ICICI Bank.
When asked about ICICI Bank’s systemic importance as a too-big-to-fail bank, he said these are global standards which are being followed in our country as well.
It can be noted that a whitleblower had written to the PMO alleging that Kochhar twisted the bank’s lending norms to extend Rs 3,250 crore loan to the Videocon group in 2010, which is now has become a dud asset. The letter also alleged that the now bankrupt group has then offered a quid pro quo to her husband Deepak.
As the controversy grabbed headlines, the board had in early June asked Kochhar to proceed on leave till an external enquiry panel headed by retired Supreme Court judge BN Srikrishna was complete.
The board also appointed ICICI group veteran Sandeep Bakhshi as the chief operating officer, who reports directly to the board.
For the June quarter, the bank reported its first loss since 2001 has it provided more for bad loans and also due to treasury losses. On a standalone basis, the bank reported Rs 120 crore of net loss for the June quarter, against net profit of 2,049 crore a year ago.
This was the first time that the bank has reported losses from its domestic operations.