The ICICI Bank Board, which has expressed full faith in their CEO Chanda Kochhar, two weeks ago, is divided over whether to ask her to step down from her position. The division took place as the government agencies investigate charges of error over loans made to Videocon group, sources said.
At least some outside directors are opposed to Kochhar continuing in her role, who asked not to be identified as the information is not public. The board of India’s second-largest private sector bank will meet as soon as possible this week to consider its next course of action.
Kochhar’s current tenure as CEO is set to end on March 31, 2019. According to a March 28 filing, ICICI’s board, which consists of 12 members, reviewed credit approval processes and found them to be robust. The board headed by Chairman M K Sharma said there was “no question” of any quid pro quo, nepotism or conflict of interest and expressed “full faith and confidence” in Kochhar.
According to data compiled by Bloomberg, including the bank’s chairman, there are six independent directors on the ICICI board, as well as the head of state-owned Life Insurance Corporation of India (LIC), which owns about a 9.4% stake. The board also includes a government nominee and five executive directors from ICICI.
Central Bureau of Investigation (CBI) recently started a preliminary inquiry into an alleged nexus between Videocon Chairman Venugopal Dhoot and Kochhar’s husband, according to officials from the agency. A preliminary inquiry is the first step to assess allegations of wrongdoing.

“Your information is totally baseless and incorrect,” an ICICI spokesman said in an email when asked if some board members want Kochhar to step down. ICICI shares were down almost a percent on the BSE at 10.54 am today. The broader Bankex index of Indian lenders rose 0.5%. ICICI has been the worst performer among private-sector peers on the 10-member gauge since May 2009, when Kochhar took over as CEO, and has a bad-loan ratio that’s one of the highest among its peers. Kochhar is on the bank’s credit committee that approves loans and reviews key borrower accounts.
“If the CEO has to step down, the shares might see a knee-jerk fall and then recover from there on,” said Gaurang Shah, head investment strategist at Geojit Financial Services Ltd. in Mumbai. “Allegations are regarding transactions which have happened in the past and the market has already priced in most of the risks that could come from it," he further added.