India’s second-largest private lender, ICICI Bank, is battling one of its biggest crises ever.

The Central Bureau of Investigation, the country’s premier investigating agency, is probing allegations of nepotism in a loan granted by the bank. The episode has called into question the role of Chanda Kochhar, the bank’s managing director and CEO and one India’s best-known bankers – a lookout notice has reportedly been issued for her at Indian airports.

In 2012, ICICI Bank extended a Rs 3,250 crore loan to a company that is part of Venugopal Dhoot’s Videocon group. This loan was granted allegedly in exchange for benefits to a firm owned by Kochhar’s husband, Deepak Kochhar. The Videocon group has since defaulted on the loan.

The ICICI Bank board of directors has thrown its full weight behind CEO Kochhar. On March 28, it denied reports of an alleged conflict of interest in the Videocon loan, calling them unfounded and malicious. Yet, there are now reports of a lookout notice for her – besides Deepak and his brother Rajiv – at Indian airports. The bank also runs the risk of legal action in the US.

The issue assumes more gravity because ICICI Bank is one of India’s domestic systemically important banks; its failure is deemed catastrophic for the country’s financial system.

So, has the board satisfactorily answered key questions arising out of the allegations? An email questionnaire sent by Quartz to the bank remains unanswered.

Why the rush to give the CEO a clean chit?

The timing of the board’s clean chit itself raises doubts.

“The ICICI Bank board, which has a government-appointed nominee, has given a clean chit at a time when the issue is being probed by the government’s investigative agencies. So how is that possible?” asked Hemindra Hazari, an independent bank analyst.

Soon after the controversy broke, the government, on April 5, changed its nominee on the board.

Why did the board not seek an external probe?

“The stand that the bank has taken is that there is no conflict of interest,” Hazari said. “But these are very specific allegations. Therefore, there is a need to have an independent probe instead of just dismissing the issue.”

Unlike their public sector counterparts, private banks are generally believed to have more stringent corporate governance frameworks. However, the ICICI Bank case now raises doubts over that assumption.

“The bank’s reluctance to support an independent probe has, in our opinion, created doubts over the strength of its corporate governance practices,” Fitch Ratings, a global rating agency, said in an April 9 note. “The investigation could also undermine investor confidence in the bank.”

Why not get candid with disclosures?

It’s not just about the Videocon loan.

CEO Kochhar’s brother-in-law Rajiv Kochhar had helped ICICI Bank’s debtors restructure their foreign loans. Even in this connection, the lender has denied any nepotism. The bank has argued that it hadn’t engaged Rajiv Kochhar’s firm and, therefore, there was no financial transaction involved. Moreover, since “husband’s brother” isn’t deemed a relative under the Companies Act, such a disclosure wasn’t necessary, the lender has said.

But not everyone is convinced.

“Even though in spirit what ICICI Bank and Chanda Kochhar are saying is true, you can’t help but wonder that if there wasn’t anything wrong then they should have just divulged the details (about Rajiv’s services to ICICI Bank’s debtors) earlier to ensure complete transparency” said a retired bank executive who requested anonymity.

The CEO’s stony silence

“Why hasn’t Kochhar said anything or offered to step down even temporarily till the probe is on? That would have been the ideal thing to do,” said another analyst who tracks ICICI Bank, requesting anonymity. “Instead we have seen only one press release and conference from the bank where none of the key issues were actually addressed. This can lead to panic among investors.”

The ICICI Bank stock has already lost 7% since March 15 when the favouritism allegations first emerged.

Kochhar’s complete silence on the matter – she has even skipped press conferences and public meetings – has only fueled speculation and doubts.

This article first appeared on Quartz.