ICICI Bank 'not interfering in Federal Bank'

ICICI Bank senior general manager M N Gopinath today denied any irregularity in the appointment of K S Harshan as the executive director of Federal Bank.

"The selection was done by the selection committee of the Federal Bank board and ICICI Bank does not have any specific interest in the appointment," he said.

"It is quiet accidental that he happened to be a former employee of ICICI Bank," he added.

"Madhavan, who is now the managing director of Dhanalakshmi Bank, had been the first choice for the Federal Bank ED's post. However, he opted for the MD's post. The Federal Bank board then approved Harshan's appointment," Gopinath explained.

Gopinath said the campaign that ICICI Bank is planning to take control of Federal Bank is baseless. The bank has already explained its position and has informed Reserve Bank of India about this, he added.

Since ICICI Bank has a 20.44 percent share holding in Federal Bank, it had nominated P H Ravikumar as its nominee on the board following the retirement of M S Parthasarathy on 5th September. ICICI Bank had given suggestions to the Federal Bank board to help improve its professional excellence.

"As is customary in the industry, ICICI Bank had asked top officials of Federal Bank to explain the general status and the financial position of the bank once in a year to top officials of ICICI Bank. This has nothing to do with grabbing control of the bank," Gopinath said.

He said that the decision to split the post of chairman into that of non-executive chairman and managing director had been taken by the Federal Bank board on September 3, 2004, and there was nothing unusual in that.

"This kind of practice is slowly getting momentum in the banking industry. The board's decision was the result of a democratic process and it is unfair to comment on the issue. Also to it is unfair on the part of any board member to give details of the discussions to the media," he said.

He added that ICICI Bank shall shed 15.44 per cent of its holding in Federal bank as the RBI allows only 5 per cent holding of a bank in another.