ICICI Bank on Thursday appointed Sandeep Bakhshi as the CEO and MD, replacing Chanda Kochhar after she sought an early retirement from the bank.
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His appointment will be for a period of five years until October 3, 2023, subject to various approvals.
"I am happy that Sandeep has been appointed as the new CEO. He is a capable banker and he will take ICICI bank to new heights, said N Vaghul, former CMD of ICICI Bank.
Vaghul said that he is happy with the board's decision to accept the Kochhar's resignation. "Impasse and uncertainty end with her resignation," Vaghul told CNBC-TV18.
What is your first reaction to the sudden announcement of Chanda Kochhar's decision to quit ICICI Bank?
I have not seen the announcement. I am hearing about it from you. My immediate reaction is I am happy that the impasse is over and Sandeep Bakhshi has been appointed as the new MD and CEO by the board.
I am sure that the board would have consulted Reserve Bank of India (RBI) before the appointment and I do not think RBI would have any problem for approving this appointment. In any case, he was already cleared for the appointment of COO on the base of fit and proper criteria. So there should not be any problem.
Going forward, I do not know the details, and Chanda Kochhar should have retired by March next year, that means that she has got six months ahead. I would not know what would be the fate of the enquiry that has been put in place. I hope that she comes out of it. If everything works out well, I will be very happy. At least for the present, the news is a bit comforting in the sense that the impasse is over and there is no uncertainty.
I am happy about the fact that Sandeep Bakhshi has been appointed. I know him very well and in fact, he joined more or less along with me, when I became chairman or a little later than my appointment. I am extremely happy, he is a very capable person and I am sure that he will take the bank forward into greater heights.
I am also hoping that the enquiry report will exonerate Chanda Kochhar. However, whatever be the outcome, I suppose we will have to take whatever is the final decision by Justice Krishna.
As of now, we have had only allegations against Chanda Kochhar, whether these allegations are true or false will be decided. I do not know when it is the time for Justice Krishna to give the final report, maybe in a couple of months he should be able to get it.
Would you have preferred that if it was indeed retirement, Chanda Kochhar should have done that earlier itself, the moment the committee was appointed?
The board would not have anticipated such a long enquiry. All this is a guesswork, I am in Chennai and I can only second guess what is happening. I am sure that the board would have felt that Justice Krishna would have accessed all the records immediately and it might have been a matter of a week before he would have given his opinion about the nature of the allegations.
They would not have expected the matter to have dragged on. So in a sense, you cannot blame anybody for that matter. However, now I think it has taken a longer time. If I remember right, there was sort of RBI intervention that they will not allow an interim arrangement for more than four months or something like that. It is quite possible that RBI must have said that we cannot continue.
The RBI has also been the purest with respect to the way in which it has treated other CEOs. For instance, recently Yes Bank’s board wanted Rana Kapoor to continue but the RBI said no. They did not give reasons but said it was probably because of regulatory shortcomings in the way in which NPAs were classified. Likewise, in the case of Shikha Sharma also the RBI did not allow the continuation of someone who they thought fell short of regulatory purity. Then again in Uday Kotak’s case when his stake had to come down from 30 percent to 20 percent and Kotak tried the preference share route, the RBI said nothing doing, we want a clear fall in your stake. What is your comment on the way in the RBI has conducted itself with CEOs?
Frankly, I think you cannot fault RBI for strictly adhering to the regulatory requirements. It is a good thing that RBI is strict in respect with these matters. Whatever may be the merits of it, rules regarding the divergence of asset classification as decided by the RBI and as approved by the board and if there is a divergence, not going into the merits of the ability of a particular individual, they go by strict rules.
I am glad the regulations are to be formed and these regulations are to be followed, I cannot question the RBI for their actions.
First Published: IST