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Year of Exits: Borrowers left as loans broke down, CEOs forced to leave

Year of Exits
1/6

Year of Exits

First, loans went kaput and borrowers left the country after defaulting on payments or committing frauds, then high-profile bankers were forced to leave and even the top central banker quit in the end -- 2018 was indeed a 'Year of Exits' for the banking sector.

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The Nirav Modi scam
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The Nirav Modi scam

The eventful year began with lid being taken off from the country's biggest ever banking fraud.

Billionaire diamantaire Nirav Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated state-run Punjab National Bank (PNB) of about Rs 14,000 crore through issuance of fraudulent letters of undertaking.

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Chanda Kochhar and her conflict of interest
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Chanda Kochhar and her conflict of interest

A whistle-blower in March raised issue of impropriety against Chanda Kochhar, the then managing director of the country's largest private sector lender ICICI Bank that for long had been a showcase institution where nothing can go wrong.

The 56-year-old Kochhar, who rose through ranks to occupy the corner office of the prestigious institution, was mired in allegations of conflict of interest, lack of disclosures and quid-pro-quo while extending loans to the now-bankrupt Videocon Industries.

Subsequently, another complaint was filed against her and she had to eventually to say goodbye in October to the bank which she had joined as a management trainee in 1984.

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Shikha Sharma and her stint at Axis Bank
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Shikha Sharma and her stint at Axis Bank

High-profile banker Shikha Sharma was denied extension by the RBI as managing director of Axis Bank, the third largest private sector lender. The bank's board had proposed another three-year term for her till May 2021, but she was allowed to serve only till December 31, 2018.

Axis Bank's NPAs jumped over five-fold in two years till March 2017, while the net profit halved in the same period. It saw its gross bad loans ratio rise to 5.04 per cent by March 2017, from 0.96 per cent in March 2009, when Sharma had taken charge.

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Rana Kapoor
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Rana Kapoor

Another exit story continues to play out at Yes Bank, where Rana Kapoor's tenure as CEO has been curtailed by the Reserve Bank of India and he has been allowed to occupy the position only till January 31, 2019.

Several lenders, including Yes Bank, were asked by the RBI to disclose 'divergences' in their bad loan reporting. The central bank judged gross NPAs at Rs 8,373.8 crore at Yes Bank for 2016-17, as against the declared gross NPAs of Rs 2,018 crore.

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RBI Governor Urjit Patel's unexpected exit
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RBI Governor Urjit Patel's unexpected exit

However, the biggest of the exits took place at the RBI itself with Governor Urjit Patel announcing his sudden resignation with immediate effect on December 10 citing "personal reasons".

The resignation, however, followed a run-in with the government over several issues including autonomy of the central bank.

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Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service