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ICICI Bank defends Chanda Kochhar: Full text of the statement

The Board of Directors of ICICI Bank gave a clean chit to its Chief Executive Officer (CEO) and Managing Director (MD) Chanda Kochhar on Wednesday, stating that there was no favoritisms or conflict of interest in granting loans to Videocon Industries or any other company.

Here’s the full text of ICICI Bank’s statement:

There have been some malicious and unfounded rumours in the past few days casting insinuations on ICICI Bank Ltd and its MD & CEO. Similar rumours had first surfaced in the mid-2016 and had been appropriately responded to. Nevertheless, these have resurfaced in the recent past to malign the bank.

In that context, the Board of ICICI Bank today (on Wednesday) reviewed the internal processes of the bank and the details of the exposure to Videocon Group.
he Board has noted that the Bank has a well-structured and standardized credit approval process, where multiple independent departments are involved in providing independent credit risk rating, doing credit appraisal, credit approvals and monitoring the proposals. The Bank’s credit approval authorization framework is laid down by the Board of Directors. The larger exposures are approved by the Credit Committee of the Board. The majority of Credit Committee members are independent directors of the Bank. The Chairman of the Credit Committee, till as late as June 2015, was always a non-Executive Director. Based on the above, it can be concluded that there are adequate checks and balances in loan appraisal, rating and approval processes within the Bank, both from the control as well as from a governance perspective.

Given this architecture, no individual employee, whatever may be his or her position, has the ability to influence the credit decision at the Bank.

With regard to ICICI Bank’s current exposure to Videocon group, the Board also recorded that:

In 2012, a consortium of over 20 banks and financial institutions sanctioned facilities to the Videocon group (Videocon Industries Ltd. and 12 of its subsidiaries/ associates as co-obligors) for a debt consolidation programmed and for the group’s oil and gas capital expenditure programmed aggregating approximately Rs. 40,000 crore.

ICICI Bank’s current exposure to the Videocon group is part of this syndicated consortium arrangement.

ICICI Bank was not the lead bank for this consortium and the Bank only sanctioned its share of facilities aggregating approximately Rs. 3250 crore which was less than 10% of the total consortium facility in April 2012.

After the preparation of the Information Memorandum and the initial due diligence for the financing programmed by the lead arrangers and after the sanction of the facilities by the lead bank, the Credit Committee of ICICI Bank in 2012 sanctioned its share of facilities in the syndicated arrangement to the Videocon group.

This Committee was chaired by the then Chairman of ICICI Bank and it included independent and working Directors of the Bank. It is important to note that Ms Chanda Kochhar was not the Chairperson of this Committee.


The Terms and Conditions offered for these loans are similar to those offered by the other banks in the consortium, ruling out the possibility of any special benefit to the borrower by ICICI Bank.

It is important to note here that all banks including ICICI Bank disbursed the Rupee Term Loan into the common escrow pool account being maintained for this purpose by the lead bank.

ICICI Bank’s share of the banking sector’s exposure to the Videocon group was less than 10% while around 90% of the loans were sanctioned by other banks and financial institutions.