ICICI Bank: Govt nominee unlikely to attend board meets till agencies come out with their probe reports

New Delhi: The government’s nominee director on the board of ICICI Bank is unlikely to attend board meetings till agencies come out with their findings on conflict of interest allegations involving the lender’s chief Chanda Kochhar, official sources said. Lok Ranjan, the nominee director and Joint Secretary in the Finance Ministry, has skipped the bank’s board meetings on Monday and Tuesday. “If government nominee attends the board meet, then it would be like endorsing board’s view. (The) government thinks that its view can be overruled (by other members of the board) as it (government) is a minority shareholder,” an official source said. The source was responding to a query on why Ranjan skipped crucial board meetings of ICICI Bank. On Monday, the board meeting was mainly to approve the bank’s latest quarterly and annual financial results. Tuesday’s board meet was to discuss strategy, budget and planning for 2018-19. Another source said that it would be prudent for the nominee director to attend board meeting only after the government receives reports from various agencies that are looking into the allegations. [caption id=“attachment_2617026” align=“alignleft” width=“380”]  File photo of Chanda Kochhar, CEO, ICICI Bank. Reuters[/caption] About the government’s stance on the allegations involving ICICI Bank and its CEO Chanda Kochhar and her family members with regard to certain loans, the sources said the government’s view would be clear only after going through reports from regulatory and investigative agencies. There are series of allegations of impropriety at ICICI Bank with respect to extending loans to some companies and enjoying reciprocal benefits. It is alleged that family members of Kochhar, including her husband Deepak Kochhar, got financial favours from the borrowers against the loans sanctioned by the bank. Multiple agencies, including the CBI and the Income Tax Department, are looking into the issues. According to the sources, the Reserve Bank of India (RBI) as powers to inspect the books of ICICI Bank. Government of India holds 1.08 crore shares of ICICI Bank which translates into 0.22 percent stake. Speaking to reporters after announcement of financial results on Monday, Chanda Kochhar said there was no discussion at all on this issue during the board meeting and that the board has already clarified its stance. Her response came to a query on whether the controversial lending to the Videocon Group was discussed at the board meeting. Asked about the silence maintained by her as well as the bank as more details get reported about the alleged misdoings, Kochhar had referred to the March 28 statement from the board which stood firmly behind her.

“The board has made its stance very clear and we do not have anything more to add,” Kochhar, who was speaking after the announcement of the banks full-year results, said. “(We are) talking of fourth quarter results now and we should focus on that. And I think the board has already clarified,” she had said.

On Monday, ICICI Bank reported a 45 percent decline in consolidated net profit to Rs 1,142 crore for three months ended March as bad loans surged. On a standalone basis, the bank recorded a 50 percent fall in net profit at Rs 1,020 crore in the latest fourth quarter. In the year-ago period, the same stood at Rs 2,025 crore. In 2001, the Boards of Directors of erstwhile ICICI and ICICI Bank approved the merger of ICICI and two of its wholly owned retail finance subsidiaries – ICICI Personal Financial Services Ltd and ICICI Capital Services Ltd – with ICICI Bank.