After 34 years, Kochhar makes an ‘unexpected’ exit

Chanda Kochhar’s 34-year association with ICICI Ltd and subsequently ICICI Bank came to a quiet and rather unexpected end on Thursday when she opted for early retirement.

Her sudden exit was seen as surprising by many after her earlier position on the allegations that she had done no wrong, but analysts believe it was long overdue to clear the reputation of the country’s third-largest bank by assets.

“Notwithstanding the significant contribution of Chanda Kochhar in the evolution of ICICI Bank, the organisation’s stakeholders and the investment community would welcome the bank’s decision to move forward. We believe the appointment of the new MD and CEO with a fairly long tenure would help provide much-needed clarity, direction and continuity to the bank. We currently have a hold rating on the stock,” said Lalitabh Shrivastawa, AVP, Research, Sharekhan by BNP Paribas.

Agreed Hemindra Hazari, an independent analyst, said: “Kochhar’s exit from ICICI Bank was long overdue. She should have been dismissed much earlier. This is in stark contrast with public sector banks, and shows the poor corporate governance practices at private lenders.”

Role model for women

Before the allegations against her came to light, Kochhar, who has been heading ICICI Bank since 2009 and was conferred a Padma Bhushan in 2011, was widely seen as a role model for women as she had managed to reach the top position in one of the largest banks in the country.

An alumnus of Jamnalal Bajaj Institute of Management Studies, she initially joined ICICI Ltd in 1984 as a management trainee, and then worked with ICICI Bank. She headed the infrastructure finance and corporate banking business at the bank.

She was elevated to the board of directors of ICICI Bank in 2001, and was appointed as Joint Managing Director and Chief Financial Officer of the bank in 2007.

She is also widely credited for building the bank’s retail business, and was a favourite of former group chairman KV Kamath. Her appointment as the MD and CEO also led to the exit of Shikha Sharma (Axis Bank chief), who was senior to her in ranking from the group. She also consolidated activities after the lender was impacted by the Lehman crisis.

However, in the last two quarters, problems with non-performing loans had also sprung up at ICICI Bank, which reported its first-ever net loss of ₹119.55 crore in the first quarter of the fiscal.

Sources said that while the decision to seek early retirement was Kochhar’s own, there had been increasing pressure with public outcry over her re-appointment to the board of ICICI Securities. Concerns were flagged at the lender’s annual general meeting last month, even as a more proactive approach was adopted by the bank’s board led by Chairman GC Chaturvedi.

“It is clear that the reputation of the bank was more important than a single individual with the new board led by Chaturvedi and with Chief Operating Officer Sandeep Bakhshi, in contrast to the blanket clearance given by the previous chairman and board members,” noted an expert, who did not wish to be named.

Kochhar was also equally known for her interest in social causes, including vocational education and Swachh Bharat, as well as a penchant for stylish saris.