The case of Chanda Kochhar demonstrates the deep rot that has India’s banking system in its vice-like grip. Ten months after the ICICI Bank declared that it reposed “full faith and confidence” in Kochhar, its CEO and Managing Director at that time, asserting that “there was no question of ...nepotism, favouritism or quid pro quo”, it did a complete U-turn. On Wednesday, the bank decided to terminate her services from no less than retrospective effect. Even more, it asked her to replay Rs 9.82 crore in bonuses since 2009 and said it would revoke her stock options, the current market value of which stands at around Rs 221 crore. While quid pro quo among the country’s political families are well known, such a barter system that exists within the corporate world is less chronicled. 

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This case shows, depressingly, how big-time corruption proliferates right under the nose of the system and its regulators. Yet, the good part is that the system, venal as it is, still has the safety valves in place, where a whistle-blower can blow a scam sky high,  without very influential and affluent people being able to do anything about it. A report by former Supreme Court judge, BN Srikrishna, found Chanda Kochhar guilty of violating the ICICI Bank’s code of conduct in disbursing loans to the Videocon Group. The bank said that Kochhar was “in violation of the Bank’s code of conduct, its framework for dealing with conflict of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations.” Just how such quid pro quo works is evident in this case. 

Back in 2012 when a loan of Rs 3,250 crore was sanctioned to the Videocon Group, Kochhar was the on the ICICI’s credit committee. Videocon promoter Venugopal Dhoot was one of the first people to invest in NuPower Renewables in 2008, a company promoted by her husband Rajiv Kochhar. Such sweetheart deals are commonplace in the world of business and finance; it is just a question of what comes out in the public domain. That such wheeling and dealing was going on right under the nose of the regulators is yet another example of how lax they can be. Much after the lid had been blown off the scam, regulator SEBI has said — somewhat belatedly and sheepishly — that the Kochhar case is pending before its adjudicating officer. 

In the NSEL case of 2013, which relates to a payment default at the National Spot Exchange, investigators have established an unholy nexus of defaulters, investors and key decision makers. NSEL was promoted by Financial Technologies India Ltd. The payment default took place when the then commodities market regulator, the Forward Markets Commission (FMC) directed the NSEL to stop launching any fresh contacts leading to the abrupt closure of the exchange in 2013. The brokers had mis-sold NSEL products to their clients by assuring them fixed returns. But as ever, all the wrongdoing was discovered from the benefit of hindsight, rather than when it was taking place.