It’s been a precipitous fall for Chanda Kochhar, from a top banker to one charged with key misdemeanours in outright fraudulent disbursal of huge loans to a firm for a clear quid pro quo involving her husband’s business. Indicted by the Srikrishna Commission for violation of ICICI Bank’s “code of conduct”, she stands exposed long before the CBI case against her meanders through the judicial process. Her case goes far beyond being the handiwork of just one corrupt banker. It brings into focus lack of internal controls in private sector banking. While the political executive is often accused of influencing lending patterns to undeserving borrowers from PSU banks for their own political ends, the shocking case of a loss of `1,730 crores from India’s top private lender exposes how great losses have been inflicted by crony lending and the canker of corruption.

The quick developments in the Chanda Kochhar case shows how laughable her internal exoneration by ICICI Bank was just months ago. Asking her to pay back all her bonuses and stock options sounds just punishment, but it will do nothing towards recovery of bad loans, adding to the huge NPAs of the entire banking sector. The work of sanctioning committees on big loans was also found short or too malleable to the machinations of bank chairmen. Considering that all this is ultimately the Indian people’s money, and it stands to reason that not only RBI’s oversight mechanisms but also banks’ very fiduciary system — large, small, public, private and cooperatives — must become far more robust. Else the Indian people’s money will still bleed, and the financial system, the economy’s lifeblood, will let down the country itself.