CASE

STUDY
ICICI
 OVERVIEW
The ICICI Chanda Kochhar case revolves around allegations concerning
Chanda Kochhar, former CEO of ICICI Bank, approving significant loans
amounting to Rs 3,250 crore for the Videocon Group. These allegations
suggest that these loans were granted under questionable circumstances,
potentially influenced by personal benefits received by Kochhar's
husband from Videocon's chairman. This raised serious concerns about
ethical conduct and conflicts of interest within the bank's leadership.
Following internal and regulatory investigations, Kochhar resigned from
her position in 2018. The case underscores the critical importance of
integrity, transparency, and stringent governance in maintaining public
trust in financial institutions.
EXPLAIN WHAT OPTIONS CHATURVEDI HAS TO PREVENT SIMILAR FRAUD SITUATIONS IN
THE FUTURE

VERIFICATION AT VARIOUS Implement Internal Controls Independent Audits and

STAGES Reviews

Chaturvedi should define a He should set up an internal There should be periodic audits
clear process for loan approval controls and should segregate and reviews by internal or
that includes checks and external auditors to assess
duties among various
balances at various stages. This
positions to ensure no single comformance with policies and
process should be transparent
individual has unchecked procedures
and well-communicated to all
staff involved to avoid similar authority over the entire loan
situation in future. approval process.
 Communication and Transparency

What can the Government should maintain open communication with the
international community, investors, and stakeholders
Indian government
do to restore the Immediate Investigation

faith of the Government can conduct a thorough and transparent investigation into the
fraud case. This should involve law enforcement agencies, regulatory bodies

International like the Reserve Bank of India (RBI), and possibly an independent audit
firm to ensure impartiality.

community in the
Indian banking Compensation and Restitution

system Government can ensure that victims of the fraud, including shareholders and
customers, are compensated fairly and promptly.
 WHETHER THE TERMINATION/ RECALLING BONUS AND STOCK OPTIONS WERE ENOUGH
PUNISHMENT FOR THE DEGREE OF THE OFFENSE COMMITTED BY CHANDA KOCHAR

No, termination/recalling of bonus and stock options alone are not sufficient punishment for
the degree of offense committed by Chanda Kochar. Here are the reasons why more serious
punishment had to be warranted
Widespread Damage
Chandar Kochar fraudulent actions lead to massive financial losses for the
bank, affecting its stability and operations. Not only this but it also affect the
reputation of bank.

International Reputation
The scandal had tarnish the bank's image among international institutions, affecting
global partnerships and reducing opportunities for international business.

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COMMENT ON THE ROLE OF THE BOARD OF DIRECTORS OF ICICI IN FULFILLING THEIR
CORPORATE GOVERNANCE DUTIES. SHOULD THEY BE HELD RESPONSIBLE IF YES, THEN
WHAT SHOULD BE THE PUNISHMENT?

The Board of Directors (BOD) plays a crucial role in overseeing the management and ensuring
the integrity and stability of a bank. However, here BOD had not adequately fulfilled its
responsibilities, which lead to create fraud in bank.

BOD should be regular and thorough audits should had been conducted, which would help in
detecting the wrong practices in the bank at the earlier stage.
There might be a lack of independent oversight to check the CEO's activities.
Yes BOD should held be responsible for this wrong practise. Following could be the punishments

Board members directly responsible for oversight failures may need to resign or be
removed from their positions.
Regulatory authorities may impose fines or penalties on the board or individual
directors.
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 GOVERNMENT

Implement and enforce laws that hold executives and board members
accountable for fraud and misconduct
Role of the Encourage transparency in banking operations through regular audits,

government, disclosures, and reporting requirements.

shareholders and SHAREHOLDERS

boards in other Shareholders should actively engage with boards of directors and management
to ensure they uphold ethical standards

banks to prevent
such cases in future BOARDS

Make sure the bank has strong rules and procedures that everyone must follow.

Conduct frequent checks and audits to catch any suspicious activity early.