RBI reply sought in Chanda Kochhar-ICICI case
A division bench of the Bombay high court on Monday directed the Reserve Bank of India (RBI) to respond to a plea made by Chanda Kochhar, former managing director and CEO of ICICI Bank, with regard to her termination from the bank.
In October 2018, Kochhar, who was facing allegations of conflict of interest, had quit the bank by taking an early retirement. However, earlier this year, the board of ICICI Bank decided to terminate her employment under its internal policies, schemes and code of conduct.
The bank had said that this will come with all attendant consequences and it decided to revoke all her existing and future entitlements that include unpaid amounts, unpaid bonuses or increments, stock options that cover unexercised or vested stock options apart from medical benefits. She will also have to return all bonuses paid from April 2009 till March 2018.
Last month, Kochhar had moved the Bombay high court challenging this decision. In her writ petition, Kochar termed her purported termination “illegal, untenable and unsustainable in law”. The petition said she ceased to be an employee of the bank after her request for early retirement, effective October 4 2018, which was accepted.
She had also contended that the private sector bank was under statutory obligations to obtain previous approval of the RBI before the purported termination of her service and claimed no such approval was obtained.
At the hearing earlier, the bank had informed the division bench that the termination order was passed later as it was awaiting a report from retired judge Justice B.N. Srikrishna.
Counsel Darius Khambata had also contended that the termination was in accordance with “contractual clauses” and that it had sought approval from the RBI for it. The bank sought approval under section 35B (1)(b) of the Banking Regulation Act 1949 for “termination of appointment”.
At its hearing on Monday, a division bench asked the RBI to file a reply and posted the matter for further hearing on December 18.