For nearly a decade, a handful of powerful Indian women had occupied the corner offices in an industry that had till then been another male bastion. That dream, however, seems to be souring now.
At least three of the biggest names involved in the turbulence that has struck Indian banking over the past few months—scams, fraud, toxic assets, and sinking profitability—are of women, some even iconic.
Last month, Usha Ananthasubramanian, CEO of the public sector Allahabad Bank, was stripped of her executive powers. This followed the unearthing of a $2 billion (over Rs13,000 crore) fraud, perpetrated during her term as managing director and CEO of Punjab National Bank (PNB), India’s second-biggest government-run lender. Earlier, in April, Shikha Sharma, the CEO of Axis Bank, said she’d step down by the end of this year after the banking regulator reportedly flagged performance issues at the country’s third-biggest private sector bank.
But perhaps the biggest name to come under a cloud is that of ICICI Bank chief Chanda Kochhar. Following allegations of nepotism in the disbursal of a loan, the managing director and CEO of India’s second-biggest private lender is now on leave till a probe to ascertain her involvement is concluded.
Last year, Arundhati Bhattacharya, chairman of the country’s largest lender, State Bank of India, also stepped down after her term ended in October 2017.
With these big names out of the picture, there are now no women at the top at any Indian public or private bank.
These developments come at a time when the country is already grappling with a gender-diversity problem: India ranks fifth from the bottom out of 35 countries in terms of women in leadership roles.
“It is sad that these cases happened, but that’s also because it has been a bad year for the entire sector,” said Rituparna Chakraborty, co-founder and executive vice-president of staffing firm TeamLease Services. “This turn of events clearly reflects that there is an issue with the ecosystem which needs an overhaul and it is not about just a few people at the top who are responsible for this.”
Chakraborty added that the banking, financial services, and insurance sector employs the highest number of women, followed by the IT sector. Despite this, there are very few women in leadership roles because most of them are unable to survive the mid-tier phase of their careers due to personal commitments. But a bafew exceptional women, now on their way out, had been able to make it.
Kochhar, one of India’s most celebrated bankers, has been at the helm at ICICI Bank since 2009. She came under pressure in March this year following allegations of a conflict of interest in a loan granted to a company founded by her husband. Initially, the bank backed Kochhar, but finally agreed to an external inquiry after questions of corporate governance were raised.
Now, she will be on leave till the probe is completed.
In the meantime, the bank has created a new position and appointed Sandeep Bakhshi as whole-time director and chief operating officer. Bakhshi, who was the CEO of the bank’s insurance subsidiary, ICICI Prudential Life, will now manage the parent organisation’s affairs in Kochhar’s absence.
Kochhar has been with the bank for over three decades, joining the erstwhile Industrial Credit and Investment Corporation of India (ICICI) in 1984 as a management trainee. Over the years, she built its retail business and expanded its balance sheet significantly. In 2011, she was awarded the Padma Bhushan, one of India’s highest civilian honours.
A former ICICI Bank employee, Sharma was in the race to become its CEO in 2009 when KV Kamath retired. However, following Kochhar’s appointment, Sharma jumped ship to join Axis Bank.
She has come under the scanner due to the lender’s poor performance in the last few years. The Reserve Bank of India was reportedly hesitant about granting her another term as chief despite the board’s approval.
With toxic loans piling up since financial year 2014, banks with a larger exposure to corporate loans were the worst-hit. Axis Bank was one of them. Under Sharma’s tenure, for instance, its gross non-performing assets (NPAs) rose from 0.96% in March 2009 to 6.77% as of March 2018. As a result, profits took a beating. Besides, the bank has also faced credibility issues due to under-reporting of bad loans and insider trading allegations.
Before the troubles began at Axis Bank, Harvard Business School published a case study in 2013 showing how Sharma, an Indian Institute of Management Ahmedabad graduate, brought about various changes under her leadership.
In February this year, a $2 billion fraud—the biggest in the country’s banking history—came to light. Over seven years, PNB was allegedly defrauded by two diamantaires, Nirav Modi and his uncle Mehul Choksi.
In a charge sheet filed by the central bureau of investigation (CBI), India’s top investigative agency, in May, Ananthasubramanian was named an accused.
Ananthasubramanian, who holds master’s degrees in statistics and ancient Indian culture, was at the helm of the bank between August 2015 and May 2017, when the fraud was in full swing. She allegedly ignored several red flags raised by the RBI over lapses in the bank’s security which allowed funds to be transferred fraudulently via the SWIFT system, a messaging service used for cross-border transactions.
At the time when the charge sheet was filed, she was the head of Allahabad Bank and so was stripped of all executive powers.
Ananthasubramanian is an industry veteran of 36 years and was head of the first pan-India women’s bank, the Bharatiya Mahila Bank. This lender was later merged with the State Bank of India. In 2016, she was ranked the 19th most powerful woman in business by Fortune India.
Earlier this year, she became the first woman to be elected chairman of the Indian Banks’ Association, an industry body.