Mumbai: The Reserve Bank of India (RBI) on Wednesday justified its 'sanction' to sack Chanda Kochhar, former managing director (MD) and chief executive officer (CEO) of ICICI Bank.
The central bank on an affidavit filed in the Bombay High Court said its decision to grant sanction was 'fair' and did not violate her fundamental and legal rights.
The affidavit filed by Navin Nambiar, the general manager of the department of regulations, RBI, urged the bench of Justices Ranjit More and Surendra Tavade to dismiss the petition filed by Kochhar challenging her termination.
In her plea filed by advocate Sujay Kantawalla, Kochhar has argued that her termination was illegal. She claimed that her services were terminated in January 2019 under section 35 (b) of the Act, which as per Kochhar was without obtaining a 'prior' sanction, mandatory as per the law.
She has argued that the ICICI Bank sacked her in January 2019 while the RBI sanctioned it only in March 2019.
Countering her claims, RBI on its affidavit said, “There was no violation of Kochchar's fundamental rights, and our decision to approve the termination of her services was devoid of any malafides or arbitrariness.”
“While giving such approvals, the RBI does not sit in judgment over the legality of the action. The RBI also does not get involved in employer-employee disputes,” the affidavit reads further.
The central bank further stated that its function was not to micromanage the actions of a bank.
“We received a letter from ICICI Bank on February 2, 2019, informing that its Board of Directors has considered the report submitted by the Justice (retd.) BN Srikrishna committee and concluded that Kochhar was guilty and reconsidered her early retirement,” the affidavit reads.
It was only after accepting her voluntary retirement in October 2018, the ICICI bank then sought regulatory approval from the RBI for termination, as per law.
“The letter was carefully considered and the RBI in March 2019, granted sanction to the ICICI bank's application and advised that the termination of appointment would be with effect from October 4, 2018, the last day of her work,” the RBI stated.
Having considered the contentions, the bench adjourned the matter till January for arguments.
The top banker - Kochhar was first named in a news report published in March 2018, which detailed her role in the alleged Rs 3,250-crore scam pertaining to a loan granted to Videocon Group by the ICICI Bank.
It is alleged that Kochhar was instrumental in sanctioning the loan out-of-turn in 2012 and soon after, at least 10 per cent of the loan amount was invested in Nupower, a company owned by her husband Deepak.
