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Eighty-three days after reposing “full faith and confidence” in ICICI Bank’s MD and CEO Chanda Kochhar and stating there was “no question of any quid pro quo/nepotism/conflict of interest”, the board of India’s largest private sector bank on Monday announced that she “has decided to go on leave till the completion of the enquiry” by former Supreme Court judge B N Srikrishna into conflict-of-interest allegations against her.

The announcement comes in the wake of speculation that she would be asked to step aside and that Sandeep Bakhshi, MD and CEO of ICICI Prudential Life, would be brought in to hold the fort. The board has now named him chief operating officer. Bakshi (57) will handle the entire range of businesses and all executive directors will report to him.

While an official communique says he will report to Kochhar “who will continue in her role as MD and CEO”, it later goes on to say that “during her period of absence he will report to the board”.

The fact that Bakshi- who was deputy MD of ICICI Bank before assuming charge of its life insurance subsidiary- has been appointed COO for five years is seen as putting him in pole position to succeed Kochhar (56). Her current term ends in March, and in the normal course, she could have looked forward to another, but with the cloud of multiple investigations and inquiries by CBI, Sebi and Srikrishna over her head, the odds on her continuing have lengthened considerably. An adverse finding could cut short even her present tenure Kochhar, who was on annual leave from the beginning of month, resumed office on Monday-if only briefly- and attended the board meeting which appointed Bakshi.

The bank’s ED and chief finance officer, N S Kannan, will take over from Bakshi at ICICI Pru. With the stock market viewing Monday’s developments as ending, at least for the moment, the uncertainty that has dogged the bank since mid-March, its stock gained 3.6 per cent.

According to sources, the scope of Srikrishna’s inquiry will be decided by the governance committee of the board. The Central Bureau of Investigation has already registered a preliminary enquiry into allegations that the ICICI Bank chief ‘s husband Deepak Kochhar’s company NuPower Renewabales received an investment from a Videocon group company as a quid pro quo for a loan from the bank.
This was followed by a fresh allegation by a whistleblower Arvind Gupta that the bank favoured the Ruias of Essar for allegedly round-tripping investments into NuPower. Kochhar had earlier decided to ride out the storm, perhaps emboldened by the board’s decision to give her a clean chit without an independent inquiry. While backing her to the hilt, the board had termed as “malicious and unfounded… the rumour spread to malign” Kochhar. But with pressure piling up and the board being accused of inaction, the directors finally, on May 30, decided to appoint an external person to head an inquiry.Whenever the time for Kochhar exit arrives, it will mark the end of an era when women controlled half of Indian banking. Besides Kochhar, this included Arundhati Bhattacharya, chairman of SBI, and Shikha Sharma, CEO of Axis Bank.

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