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Chanda Kochhar quits ICICI Bank, Sandeep Bakhshi new CEO
Chanda Kochhar | Photo Credit: Reuters

Chanda Kochhar, the embattled managing director and chief executive officer of ICICI Bank, resigned on Thursday with immediate effect.

In a stock-exchange filing, the private-sector lender said its board had accepted Kochhar’s request for early retirement and that current chief operating officer Sandeep Bakhshi will replace her for a five-year term until 2023.

Kochhar is also stepping down from the board of directors of the bank’s units.

The bank said that independent director MD Mallya has quit as well, citing health reasons. 

Shares of ICICI Bank, the country's third-largest lender by assets, climbed as much as 5.8% following the announcement.

Kochhar, 56, has been on leave since June pending the completion of an inquiry into allegations regarding dealings with the Videocon Group and a company in which her husband had a stake.

After Kochhar went on leave, the lender appointed Bakhshi as chief operating officer of ICICI Bank and put him in charge of the day-to-day functioning. 

Bakhshi had been a deputy managing director at ICICI Bank before being appointed MD and CEO of ICICI Prudential Life in 2010.

Kochhar’s current term was due to end in March next year and she would have likely sought another five-year tenure, but for the snowballing controversy over quid-pro-quo allegations.

She was accused of favoring her businessman husband Deepak Kochhar, his brother and Venugopal Dhoot, the promoter of the Videocon Group.

ICICI Bank had instituted an internal probe, which was headed by retired judge B N Srikrishna. The bank said on Thursday that the inquiry proceedings initiated against Kochhar will remain unaffected. 

Apart from ICICI Bank’s internal probe, at least two law enforcement agencies - the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) - have reportedly been looking into the alleged quid-pro-quo deals.

The controversy first came to light in 2016, when a whistleblower alleged that Kochhar had unduly favoured Dhoot and the Videocon group, which had business relations with NuPower Renewables Pvt Ltd that was promoted by her husband Deepak.

At the heart of the controversy was a Rs 3,250 crore loan - which remains unpaid - that ICICI Bank had given to Videocon in 2012. Before that, in June 2009, Dhoot had reportedly quit as a director on NuPower’s board, and transferred 25,000 shares of the company to Deepak for Rs. 2.5 lakh. In March 2010, Supreme Energy, 99.99% owned by Dhoot, had reportedly loaned Rs 64 crore to NuPower.

Besides the CBI and ED, market regulator Securities and Exchange Board of India (SEBI) had also issued notices to ICICI Bank and Kochhar.

Kochhar took over the reins at the bank in 2009 as she stepped into the shoes of predecessor KV Kamath. She was one of several celebrated women executives at the bank from that era along with Madhabi Puri-Buch, Renuka Ramnath, Kalpana Morparia and Shikha Sharma, who will step down as Axis Bank CEO later this year.

In June a VCCirlcle analysis showed how Kochhar’s tenure had been a mixed bag for ICICI Bank as the bank’s profits come under pressure just as bad loans soared, even as its interest income and advances grew in the nine years she was at the helm.

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