Chanda Kochhar: the feisty banker in the eye of a storm

Her husband counts Mukesh Ambani among his friends. Indeed, both her children and the son-in-law work for Reliance. Her brother-in-law Rajiv Kochhar runs a successful financial company in Singapore and Chanda Kochhar, Managing Director and CEO of India’s largest private bank ICICI, is among the few Indian women who have broken the glass ceiling and risen to head a bank which is second only to the state-owned State Bank of India and is the largest private sector bank in the country.

The success story of the Jodhpur girl who was brought up and educated in Jaipur and Mumbai, a cost accountant and a management graduate, is the stuff legends are made of. But Padma Bhushan Chanda Kochhar suddenly finds herself in the eye of a storm and her personal integrity questioned over her husband’s business dealings and her bank’s whopping loan to the Videocon Group of Venugopal Dhoot.

In a letter she wrote to her daughter in 2016, there is a passage which describes how she dealt with a crisis of confidence in the bank among both shareholders and depositors. The passages are revealing:

“I remember how, in late 2008, we were faced with a situation where ICICI Bank’s survival was in jeopardy in the face of a global economic meltdown. The situation was being analysed with a hawk’s eye by major media platforms and debated widely in the public space… I got down to work, systematically communicating with all stakeholders – from the smallest depositor to the sophisticated investors, and from regulators to the government – the bank was sound and its exposure to these institutions involved a small portion of its assets.”

“I understood their concern because so many of them feared that their hard earned savings in our bank could be at risk. I also advised staff across the bank’s various branches to lend a sympathetic ear to those depositors who turned up to withdraw their money, telling them to also offer the depositors a seat and a glass of water while they waited. And though, depositors were welcome to withdraw their money if they wanted to, our staff also took care to explain to them that it would not help them to take their money away, because there was no real crisis situation.”

“It was during this period that I took a couple of hours off one day to attend your brother’s squash tournament. I did not know it then, but my very presence at the tournament went a long way in reinstalling customer confidence in the bank. A few mothers at the tournament came and asked me if I was Chanda Kochhar from ICICI Bank and when I replied in the affirmative they said that if I could still find time to attend a tournament in the midst of a crisis, it meant that the bank was in safe hands and they need not worry about their money!”

But faced with two consecutive controversies over the bank’s loans to Geetanjali Gems of Mehul Choksi, who with nephew Nirav Modi escaped from the country earlier this year, and the the Videocon group, Kochhar pulled out of a planned felicitation in New Delhi on April 5. The event was to be hosted by the FICCI Ladies Organisation and President of India was to felicitate her.

She has maintained a studied silence on the swirling controversies triggered by a report in The Indian Express following allegations by a whistle blower Arvind Gupta (see interview). Gupta had written to the PMO in 2016 questioning whether Kochhar had disclosed her husband’s connections with Venugupal Dhoot before the bank agreed to give the industrial group a loan of ₹3,250 crore.

The most charitable defence of Kochhar has been that she could not have avoided conflict of interest in the bank’s dealings even if she wanted. Having studied in Bombay and having worked in ICICI for over three decades, she does count the industry’s who’s who among her friends list.

Indeed, when her daughter got married some three years ago, not just Ambanis but Gautam Adani and other industry leaders turned up along with Union Finance Minister Arun Jaitley and Piyush Goyal. Media reports said that the celebrations went on for four days across three five-star hotels in Mumbai.

It was not surprising because media reports had put her earnings at ₹2.18 lakh every day. In 2016-17, she was said to have taken away ₹7.81 crore by way of salary. This included a performance bonus of ₹2.2 crore, making her one of the highest paid bankers in the country. In contrast, SBI chairperson Arundhati Bhattacharya, it was reported, had an annual compensation package of ₹28 lakh.

Conferred a Padma Bhushan in 2011, she is a member of the Prime Minister’s Advisory Council on Trade & Industry and has been a familiar face at the World Economic Forum at Davos. Time magazine in 2015 listed her among the world’s 100 most powerful women.

The Indian Express, which first carried the report on the strange dealings between some companies owned by Venugopal Dhoot and Chanda Kochhar’s husband, said in an editorial comment that a ‘clear conflict of interest is not in doubt’. Kochhar faces tough questions and the bank is yet to allay those doubts.