Days after the market regulator served a notice to ICICI Bank MD and CEO Chanda Kochhar on the bank’s dealings with Videocon, the bank’s board has agreed to an independent probe into the allegations against her.

In a stock exchange filing on Wednesday, the board said it has “decided to institute an enquiry to be headed by an independent and credible person” to examine the allegations that were made by a whistleblower against Kochhar.

The filing also said that the scope of the probe would include “all relevant matters arising out of and in the course of examination of the facts and wherever warranted, use of forensic/email reviews and recordal of statements of relevant personnel, etc”. The bank said the enquiry would also cover “all connected matters in the course of the investigation to bring the matter to a final close”.

Kochhar has been accused of non-compliance with the bank’s code of conduct in issuing loans to Videocon. It has been alleged that after Videocon secured the loan, the company’s chairman Venugopal Dhoot invested Rs 64 crore in NuPower Renewables, founded by Deepak Kochhar, husband of the bank’s CEO. The Central Bureau of Investigation is investigating the case.

Some analysts say this could mean that a resolution of the issue is in sight in one way or another—be it the clearing of the clouds above the bank, or Kochhar stepping down. “Something has to give. It would be great if ICICI and Chanda Kochhar can immediately provide a satisfactory response to all the specific allegations. If not, then for the sake of a great institution and for her own sake, she should step aside till the air is cleared,” said Ananth Narayan, a banking expert.

Shriram Subramanian of InGovern was of the view that the board should have initiated a probe before they placed full faith in Kochhar and backed her. “The board members have to be convinced as to what the truth is. By rushing to back her without an investigation, I don’t think they did the right thing,” he said.

However, Subramanian said that expecting Kochhar to step down was perhaps a tall ask. “The allegations did not come from an insider, but from an outside whistleblower. So in such a case to expect her to step down is probably too extreme a step and doesn’t do her justice,” he added. But he expressed confidence that an independent investigation will expedite the resolution process as probes by government agencies are often long drawn.

ICICI Bank’s stock had declined nearly 7% between January 1 and early May. The stock closed at Rs 285.25 on the BSE on Wednesday, down 1.86% from the previous day’s close.

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