Prashant Bhushan writes to RBI opposing ICICI CEO Sandeep Bakhshi’s tenure extension: ‘Frauds, systemic failures, violations’

Public interest lawyer and activist Prashant Bhushan has written to the Reserve Bank of India, asking the central bank not to extend the tenure of ICICI Bank managing director and chief executive officer Sandeep Bakhshi. In a representation sent on Monday evening, Bhushan alleged persistent regulatory violations, systemic governance failures, widespread frauds and labour law violations during Bakhshi's tenure.

According to CNBC-TV18, which said it had seen and reviewed the letter, the move comes after India’s second-largest private-sector lender sought a two-year extension for Bakhshi in January as part of its succession planning, instead of the usual three-year term.

In the 10-page letter, Bhushan urged the RBI governor to use the central bank’s statutory powers, duties and supervisory jurisdiction under the Banking Regulation Act, 1949, including Sections 35A, 35B, 36AA and 10B. “This representation highlights a comprehensive account of persistent regulatory violations, systemic governance failures, widespread frauds, and egregious labour law violations during the tenure of Mr Sandeep Bakhshi, and respectfully submits that any approval for his continuation or re-appointment would be contrary to the statutory mandate imposed upon the Reserve Bank of India,” the letter said.

Bhushan’s first ground was a set of RBI penalties on ICICI Bank under Sections 46 and 47A of the Banking Regulation Act. He referred to eight penalties, including a ₹12 crore penalty over loans sanctioned to entities connected with directors, failure to report frauds within the prescribed timelines, and sale of non-financial products, which he described as an impermissible activity. He wrote that these were not technical or minor breaches, but related to lending discipline, fraud reporting, cyber security and customer protection. The period cited for that penalty was 2020 and 2021, not the Chanda Kochchar era. Similar penalties have also been imposed on private-sector peers such as HDFC Bank and Axis Bank.

On the second point, Bhushan listed 23 instances of financial and other fraud since 2024. Of these, 22 involved monetary losses of a combined ₹245 crore across various ICICI Bank branches, while one related to a data breach. He argued that the pattern itself required the RBI to act in the public interest and said the statutory framework did not require the regulator to wait for a catastrophic failure before intervening. The losses cited amount to about 0.25 per cent of the bank’s net profit over the last two years, and Bakhshi is not individually accused in any of these cases.

Bhushan also referred to findings by labour authorities and said the bank had failed to provide evidence for disciplinary action and did not furnish relevant records despite repeated directions. He cited reports that 782 employees, or around 800 in media accounts, were marked as having stopped reporting to work between January and June 2024. The letter said these employees accounted for about 0.39 per cent of the bank’s staff at the time, and added that proceedings were initiated to seek prosecution sanction against Bakhshi.

He further cited four cases of suicide involving bank employees in the recent past and linked them to work-related issues. The representation also alleged large-scale terminations and employee harassment, against the backdrop of rising work-related stress across sectors.

On tax compliance, Bhushan alleged that non-compliance with the GST framework had led to heavy demands and liabilities. He referred to notices and orders from authorities in West Bengal, Mumbai East and Maharashtra, and said the aggregate demand and notice amount was over ₹1,224 crore. “The magnitude, frequency and geographical spread of these demands,” he wrote, “clearly demonstrate systemic lapses in tax compliance and internal audit controls.” 

Bakhshi took charge in October 2018 after the exit of former chief executive Chanda Kochchar, and the early part of his tenure was marked by a clean-up at the bank. Under him, ICICI Bank has narrowed the gap with sector leader HDFC Bank on growth measures. ICICI Bank’s annual net profit has risen 7.4 times, its loan book has grown 2.8 times, and its quarterly net interest margin has moved up from 3.33 per cent to 4.32 per cent.