By Prarthana Mitra
Just months after an independent query was launched into ICICI Bank CEO and MD Chanda Kochhar for involvement in the Videocon loan case, the private bank pulled Sandeep Bakshi out of near-retirement and made him the Wholetime Director and Chief Operating Officer (COO) designate for the next five years.
To put this in context
The appointment comes just weeks after Kochhar goes on indefinite leave, following allegations of quid pro quo in sanctioning loans to Videocon Group that surfaced in May. The board further announced that she would only return after the internal investigation into the Videocon loan case was complete.
Bakhshi has been handed the reins of the ICICI Bank for a tenure of five years, wherein he will oversee all its business and corporate functions. During this time, he will report to bank’s MD and CEO Chanda Kochhar, and to the ICICI Bank board until she returns.
Better late than never or a complete farce? Chanda Kochhar to go on leave till an enquiry against her finished. So she’s still the designate MD&CEO. ICICI Pru Sandeep Bakshi appointed at COO. He will report to Chanda & to the board in her absence. #icici #ICICIBank #ChandaKochhar
— Nayantara Rai (@NayantaraRai) June 18, 2018
Since the allegations surfaced in late March, ICICI Bank’s shares have underperformed the Sensex. On Monday, shares of ICICI Bank gained 3.61% after The Economic Times reported the news of the appointment.
Jumping onto a burning ship, Bakshi’s first order of business will be to convince investors, shareholders and regulators to find it in their hearts and put their faith again in the bank’s corporate governance standards. The bank’s practices have become questionable after the gross conflict of interests in the Videocon affair came to light. Bakhshi would also do better to deal with the bank’s under-performing and stressed assets with promptness.
So why has the bank brought Sandeep Bakshi to steady the ship?
Firstly, Bakhshi is no stranger to crisis. When the global financial crisis was raging in 2008, the ICICI Bank brought Bakshi in as the deputy managing director from ICICI Lombard to solve the immediate issue of rising delinquencies. Shortly afterward, in 2010, he took charge of ICICI Prudential Life when the industry lacked structure, direction, and expertise.
“The appointment of Mr. Sandeep Bakhshi as chief operating officer is the most practical middle ground that the board could have adopted. Mr. Bakhshi’s immediate priorities would be to get the executive leadership team to rally around, rebuild currency with stakeholders including the regulator, investors and shareholders, and install the support system that the probe committee needs in order to conduct its investigation in a fair and transparent manner,” a bank analyst, ASV Krishnan told Live Mint on Tuesday.
His qualifications speak for themselves
Bakhshi returns to ICICI Bank after serving as managing director and CEO of ICICI Prudential Life for eight years.
57-year old Bakshi has a management degree from Xavier Labour Relations Institute, Jamshedpur, and was already on an extension, just years away from retirement.
Bakshi started his professional career at a computer marketing company before his stint in ICICI Ltd began in 1986, where he handled ICICI’s corporate clients in the northern and the eastern regions. When he shifted focus in 2002 Bakshi assumed responsibilities for business development, project appraisals, project monitoring and business re-structuring at ICICI Lombard. He was finally appointed as MD and CEO of ICICI Prudential Life Insurance Company, a position he held till his latest appointment.
Sandeep Bakshi loses job at ICICI Prudential life. His appointment at ICICI looks a done deal. Wonderful Governance. pic.twitter.com/p1pVixepC6
— R. Balakrishnan (@BalakrishnanR) June 19, 2018
With over 30 years in ICICI Ltd, Bakshi’s experience and insights will be invaluable to the bank. He has been an integral part of the bank’s development from a financial institution to a full-fledged financial services entity. Kamesh Goyal who chairs Digit Insurance told ET, “He is close to the business and [is the] only one who knows corporate banking, retail banking, life insurance and general insurance.
The recent appointment makes him the senior-most official at ICICI Bank after Kochhar. With Kochhar set to retire on March 31, 2019, Bakhshi is perhaps ahead in the race for the top post of chief executive.
Prarthana Mitra is a staff writer at Qrius.
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