ICICI Bank CEO extension 2026: Bhushan urges RBI review

What triggered the fresh scrutiny

Senior advocate and activist Prashant Bhushan has written to the Reserve Bank of India (RBI) governor opposing the extension granted to Sandeep Bakhshi as Managing Director and Chief Executive Officer (MD and CEO) of ICICI Bank. In his letter, Bhushan alleged “widespread frauds, and egregious labour law violations” during Bakhshi’s tenure. The representation seeks regulatory intervention ahead of the next term, which still requires approvals from the RBI, shareholders, and other statutory authorities. The development places a governance decision by India’s second-largest private lender under a public spotlight. It also brings attention to how boards and regulators interpret repeated compliance issues at large banks.

ICICI Bank board approves a two-year reappointment

ICICI Bank said its Board of Directors unanimously approved Bakhshi’s re-appointment for a further period of two years. The proposed term is from October 4, 2026, to October 3, 2028, and comes after his current tenure ends on October 3, 2026. The decision was taken at the board meeting held on January 17, 2026. The board also approved the bank’s unaudited financial results for the quarter and nine months ended December 31, 2025, on the same day. According to an Economic Times report cited in the provided material, the board noted the reappointment is in line with the RBI’s Commercial Banks: Governance Directions, 2025.

Bhushan’s letter and the legal provisions cited

Bhushan’s representation runs to 10 pages and asks the RBI to use its statutory powers and supervisory jurisdiction under the Banking Regulation Act, 1949. He specifically referred to Sections 35A, 35B, 36AA, 10B and allied provisions. The letter argues that approving continuation or re-appointment would be “contrary to the statutory mandate” of the RBI, given what he described as persistent issues during Bakhshi’s tenure. Bhushan framed the allegations as a pattern rather than isolated events, and urged the regulator not to wait for a “catastrophic failure” before intervening.

Allegations: penalties, governance failures, and internal controls

Bhushan alleged that the RBI imposed a number of penalties during Bakhshi’s tenure between 2019 and 2025, amounting to “crores of rupees”. He wrote that these penalties, imposed under Section 47A of the Act, were not minor or technical. The letter claims they related to key regulatory areas including lending discipline, fraud reporting, cyber security, and customer protection. Bhushan argued the cumulative effect demonstrates a “persistent pattern of non-compliance” and points to failures of internal controls, risk management, and supervisory oversight. He further stated that repeated regulatory violations under the same managing director indicate systemic governance failure and managerial inadequacy.

Claims around fraud cases and tax-related demands

The representation lists “a number of financial and other fraud cases reported in the media,” according to the text provided. It also refers to the “magnitude, frequency and geographical spread” of certain demands, which Bhushan said indicates systemic lapses in tax compliance and internal audit controls. The letter contends these issues cannot be treated as isolated or inadvertent errors, but instead suggest deeper governance and supervision failures. Based on this, the representation claims that the affairs of the bank under Bakhshi have been inconsistent with statutory obligations and the standards expected of a regulated banking entity.

RBI direction on agricultural priority sector portfolio

Separately, ICICI Bank disclosed a specific regulatory direction from the RBI on provisioning. The lender said the RBI directed it to make a standard asset provision of ₹1,283 crore for a portfolio of agricultural priority sector credit facilities. The bank said the terms of these facilities were found to be not fully compliant with regulatory requirements for classification as agricultural priority sector lending. This disclosure adds to the compliance context around the board’s extension proposal, even as the bank proceeds through the required approval process.

What ICICI has said in earlier public disputes

The material also references a 2024 report by The Morning Context, which claimed Bakhshi indicated he wanted to be relieved as MD and CEO and that the RBI was “dead against” it. ICICI Bank denied those claims, calling them “baseless”, “misleading” and a “figment of imagination”. While that episode predates the current extension decision, it shows that leadership continuity at ICICI has drawn heightened attention in recent years. The current episode similarly mixes board process, regulatory review, and public claims by external stakeholders.

Why the extension is two years, not three

In a media interaction after Q3 FY26 results, Executive Director Sandeep Batra addressed why the term was limited to two years. He said the decision was taken at the board level, and that the board, in discussion with the managing director, decided on a two-year term. The provided material also notes that under RBI regulations, private bank chiefs can be at the helm for up to 15 years or until they turn 70. It states that 65-year-old Bakhshi is eligible for another full three-year term, but that it depends on what the board and RBI decide. The two-year recommendation therefore becomes a key signal in how the board is framing succession planning and regulatory alignment.

Key facts at a glance

Market and governance implications to watch

The reappointment proposal and Bhushan’s letter together underline the role of regulatory approval in senior leadership continuity at private banks. The representation leans heavily on the RBI’s supervisory powers under the Banking Regulation Act and argues that repeated penalties should inform any decision on continuation. ICICI Bank’s disclosures make clear that the extension is not final until the RBI and shareholders approve it. In practical terms, the next steps are procedural but consequential, because the RBI’s view and the shareholder vote will determine whether the board’s decision takes effect. For investors, the immediate focus is less on speculation and more on the formal approval chain and any additional regulatory communication that may follow.

Conclusion

ICICI Bank’s board has approved a two-year reappointment of Sandeep Bakhshi from October 2026 to October 2028, but the proposal is subject to RBI and shareholder approvals. Prashant Bhushan’s letter asks the RBI to withhold approval, citing alleged regulatory violations, governance failures, and labour law concerns during Bakhshi’s tenure. The bank has also disclosed an RBI direction to create a ₹1,283 crore standard asset provision tied to agricultural priority sector classification compliance. The next confirmed milestones are the regulatory review and the shareholder approval process before the new term can take effect.