The Reserve Bank of India (RBI) is said to have raised certain queries regarding the Axis Bank board's proposal to reappoint Shikha Sharma as MD and CEO for a fresh term beginning June 2018. The queries come over eight months after the board approved Sharma's reappointment. “The bank's board follows a standard process on senior appointments, and forwards its recommendations to the regulator. This process is currently in progress and we are unaware of any final decision on this issue. We would like to mention that the correspondence between regulator and bank is strictly private and confidential,” Axis said in a statement.
Several competent officers allegedly left the bank because of Sharma. Sources said RBI has become cautious on executive appointments as it is currently under pressure from the government. It had earlier in March imposed a penalty of £300,000 on Axis for misstating level of NPAs. In a statement, RBI had said that inspection of the bank with reference to its FY16 accounts showed that “violations of various regulations issued by RBI in assessment of NPAs.” The central bank has been taking a tough stance on divergences, imposing penalties on banks for not recognising defaults.
ICICI Bank fined
The RBI earlier fined ICICI Bank £5.89 million for violating norms relating to sale of government securities from the held-to-maturity category of its bonds portfolio. This is the highest penalty imposed by RBI on a bank for a single incident. In a release, RBI said that it has imposed a penalty on ICICI Bank for “non-compliance with directions issued by RBI on direct sale of securities from its HTM portfolio and specified disclosure in this regard”.
