The Accidental Heir

Sandeep Bakhshi’s appointment as COO may not stop the chatter against Chanda Kochhar, but it will allow ICICI Bank to focus on its core business

- Salil Panchal

June 18, 2018, could well become a defining date in the history of ICICI Bank. With CEO Chanda Kochhar going on leave to allow an independent investigation into charges of impropriety levelled against her, the bank’s board created a new post, appointing Sandeep Bakhshi as chief operating officer (COO). An ICICI group veteran of 32 years, Bakhshi—he was managing director and CEO of ICICI Prudential Life Insurance since August 1, 2010—is seen as Kochhar’s heir apparent.

Kochhar, 56, has been in exile since June 1, until an internal inquiry into allegations of quid pro quo against her and her family for loans made by the bank to Videocon Industries in 2012 gives its report. In May, market regulator Securities and Exchange Board of India (Sebi) issued a show cause notice against Kochhar and ICICI Bank for violating the bank’s code of conduct by not making necessary disclosures. Sebi may even initiate an adjudication process against the bank.

In such turbulent times—which includes corporate governance issues, questions around leadership, and rising levels of non-performing assets (NPAs)—Bakhshi’s entry may not be the panacea the bank is looking for. It has little to do with the 57-year-old himself, and is more about how the board of India’s largest private lender has dealt with the crisis; the bank has lost much of its sheen and reputation.

FENCE-SITTING 

The board chose to walk a tightrope by trying to ensure a high level of governance and transparency to shareholders, while backing its popular CEO, who had charted a new growth path for the bank since the 2008 global financial crisis.