ICICI Bank loan controversy: Law will take its own course, says Reserve Bank governor Shaktikanta Das

Mumbai: In its first comments on the Chanda Kochhar affair involving allegations impropriety while heading ICICI Bank, the Reserve Bank Thursday said it is for the law enforcement agencies to take an action in the case.

The role of the regulator is limited to looking at the violations of its regulations by individuals or groups, and act on the same, governor Shaktikanta Das said.

"If there are certain things which require investigation, that is in the domain of the investigating agencies and it's for them to take further action," he told reporters during the customary post-policy press conference.

He was replying to a specific question on how the banking regulator looks at the developments at the ICICI Bank, where an independent enquiry constituted by the lender has found Kochhar guilty of misconduct.

A few days before her virtual expulsion, the CBI filed an FIR naming Kochhar and others in the alleged quid pro quo in extending a Rs 3,250-crore loan to the Videocon Group.

A file photo of Chanda Kochhar. Reuters.

Amid raging controversy over the case, Kochhar - also a Padma Bhushan awardee and the first woman to head a bank in the country way back in 2009--quit the bank in October 2018 months after the lender had given a clean chit to her.

The independent probe panel headed by retired Supreme Court judge BN Srikrishna has observed that Kochhar violated bank policies and other rules and regulations.

There were allegations of involvement of Kochhar and her family members in a loan provided to the Videocon group on a quid pro quo basis. It was alleged that the Videocon Group pumped money into NuPower Renewables, a firm now owned by Deepak Kochhar, husband of Chanda Kochhar.

The allegation of conflict of interest was levelled by whistleblower Arvind Gupta.

Interestingly, there are media reports saying the RBI had given her a clean chit in 2016 itself, when the allegations first surfaced.

Following the Srikrishna panel report, the bank said it would not treat her leaving the bank as retirement but a termination of her service and also decided to claw back the around Rs 10 crore bonus paid to her between 2009 and March 2018 along with blocking her close to Rs 340 crore of Esops- both a first in the country. She is reportedly planning a legal challenge to both punitive actions.