Srikrishna panel report on Chanda Kochhar likely in 2 mths: ICICI Chairman

Chanda Kochhar
ICICI Bank Chairman G C Chaturvedi said on Thursday that the decision on the continuance of Managing Director (MD) and Chief Executive Officer (CEO) Chanda Kochhar will be taken after the Justice B N Srikrishna panel report - probing certain allegations against her - is finalised, which is likely in two and a half months.

The former Supreme Court judge is heading the panel, which is probing the allegations of quid pro quo by Kochhar in sanctioning of a loan by ICICI Bank.

He further said that pending the report, Kochhar remains the CEO of ICICI Bank.

Kochhar, however, is on indefinite leave following the conflict-of-interest allegations. 

On the latest quarterly losses posted by the bank, Chaturvedi said they were due to the Reserve Bank of India (RBI) norms. However, slippages have ended, he added.

Posting its first quarterly loss, ICICI Bank reported a net loss of Rs 1.19 billion for the three months to June due to higher provisioning for bad loans. It had posted a net profit of Rs 20.49 billion in the year-ago period. However, on a consolidated basis, the group posted a meagre profit of Rs 49.3 million, compared to Rs 26.04 billion a year ago.

Chaturvedi batted for reviewing the controversial one-day default norm by the RBI as the deadline for resolution of power assets approaches. 

“I think the RBI should reconsider (one-day default norm),” he told reporters on the sidelines of a banking event, organised by the Centre for Economic Policy Research, a think tank close to the Sangh Parivar and the NITI Aayog. 

He said the RBI itself has come out with so many schemes in the past to settle bad debts. “This (one-day norm) is one of them. May be some of the issues are resolved, but if some persist, the RBI should reconsider,” Chaturvedi said. 

A controversial RBI circular, issued in February, asked banks to identify power projects with even one day’s default as stressed assets, and conclude their resolution proceedings within 180 days. 

Chaturvedi hoped the issue would be resolved by the August 27 deadline. When asked what the ICICI Bank strategy for it was, he said it was not an issue specific to the bank. 

At the event, he said the RBI circular was trying to cure the disease the wrong way. “It is like curing the legs when I have a headache,” he said. 

Elaborating further, he said the problem of bad debt lay elsewhere. But since the RBI is the regulator for banks, it is trying to find solutions within that constraint. 

“Solutions are to be found elsewhere. Say if there is delay in land acquisition, environmental clearances or power purchase agreement not being signed by the state governments, these problems need to be tackled.”

The issue of the RBI’s contentious circular is sub-judice in the Allahabad High Court. 

Chaturvedi further said the government should consider reducing equity stake in select public sector banks below 51 per cent. He said this may not be considered for all banks. It is for the government to take this call, he said. 

Economist and former principal economic advisor in the finance ministry Ila Patnaik said a review should be made whether nationalisation of banks has achieved its desired objective. 

UCO Bank MD & CEO Ravi Kishan Takkar said the current minimum capital norms are stricter than Basel III. “We have to relook these norms,” he said.

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