Kochhar was born in Jodhpur, Rajasthan and raised in Jaipur, Rajasthan. She was educated at St. Angela Sophia School, Jaipur. She then moved to Mumbai, where she joined Jai Hind College for B.Com degree of University of Mumbai. After graduating in 1982, she studied cost accountancy from Institute of Cost Accountants of India, and later acquired MMS degree of University of Mumbai from Jamnalal Bajaj Institute of Management Studies, Mumbai. She received the Wockhardt Gold Medal for Excellence in Management Studies as well as the J. N. Bose Gold Medal in Cost Accountancy.

In 1984, Kochhar joined the Industrial Credit and Investment Corporation of India (ICICI) as a management trainee. During her early years at ICICI, she handled project appraisal and monitoring and evaluated projects in industries such as textile, paper and cement.

Kochhar was instrumental in establishing ICICI Bank during the 1990s. In 1993, Kochhar was appointed as one of the core team members who were assigned the responsibility of setting up the bank. She was promoted to assistant general manager in 1994 and then to deputy general manager in 1996. In 1996, Kochhar headed the newly formed Infrastructure Industry Group of ICICI Bank, which aimed to create dedicated industry expertise in the areas of power, Telecom and transportation. In 1998, she was promoted as the General Manager and headed ICICI Bank's major client group, which handled relationships with ICICI's top 200 clients. In 1999, she also handled the strategy and e-commerce divisions of ICICI Bank. Under Kochhar's leadership, ICICI Bank started building the nascent Retail Business in 2000 focusing largely on Technology, innovation, process engineering and expansion of distribution and scale. In April 2001, she took over as executive Director. In 2006, Kochhar was appointed as deputy managing Director of ICICI Bank. In 2006–07, Kochhar handled the international and corporate businesses of the bank. From 2007 to 2009, she was the bank's chief financial officer (CFO) and joint managing Director.

Under Kochhar's leadership, ICICI Bank won the "Best Retail Bank in India" award in 2001, 2003, 2004 and 2005 and "Excellence in Retail Banking Award" in 2002; both awards were given by The Asian Banker. Kochhar personally was awarded "Retail Banker of the Year 2004 (Asia-Pacific region)" by the Asian Banker, "Business Woman of the Year 2005" by The Economic Times and "Rising Star Award" for Global Awards 2006 by Retail Banker International. Kochhar has also consistently figured in Fortune's list of "Most Powerful Women in Business" since 2005. She climbed up the list debuting with the 47th position in 2005, moving up 10 spots to 37 in 2006 and then to 33 in 2007. In the 2008 list, Kochhar features at the 25th spot. In 2009, she debuted at number 20 in the Forbes "World's 100 Most Powerful Women list". She is the second Indian in the list behind the Indian National Congress party chief Sonia Gandhi at number 13. In 2010, she fell to number 92 in the Forbes list, but in 2011 bounced back to 43. As of 2014, she ranks at #43. And in 2015 she climbed up to #35 again. In 2017, she was raked at # 32 and she ranked the highest among the 5 Indian woman who made it on the list, which included #57 Roshni Nadar Malhotra, #71 Kiran Mazumdar-Shaw, #92 Shobhana Bhartia and #97 Priyanka Chopra.

In 2009 Kochhar was appointed as managing Director and chief executive officer of the bank and has been responsible for the bank’s diverse operations in India and overseas. She also chairs the boards of most of the bank’s subsidiaries, which include India’s leading private sector life and general insurance companies.

In 2011, Kochhar was awarded the "ABLF Woman of Power Award (India)" at the Asian Business Leadership Forum Awards.

Kochhar was ranked as the most powerful businesswoman in India in Forbes' list of 'The World's 100 Most Powerful Women 2013'. Kochhar was also featured in the Power List 2013 of 25 most powerful women in India by India Today, for the third year in a row.

Kochhar has also consistently figured in Fortune's list of "Most Powerful Women in Business" since 2005. In 2009, she debuted at number 20 in the Forbes "World's 100 Most Powerful Women list", and climbed to the 10th spot in 2010. In 2011, she featured in Business Today's list of the "Most Powerful Women – Hall of Fame". In 2011, she also featured in the "50 Most Influential People in Global Finance" List of Bloomberg Markets. Chanda Kochhar was awarded with ASSOCHAM Ladies League Mumbai Women of the Decade Achievers Award on 2 January 2014.

Kochhar was selected in Time magazine's list of the 100 Most Influential People in the World 2015. In 2015, she was ranked first in the Fortune List of 100 Most Powerful Women in Asia Pacific.

Acting on a 2016 allegation of a shareholder of Videocon Group over a possible conflict of interest of Kochhar, ICICI Bank's board reviewed its credit approval process and found them strong and cleared Kochhar of the allegations.

In 2017, Kochhar was featured in Business World magazine's ‘BW's Most Influential Women’ list as an evergreen woman leader. In May of the same year, she received the Woodrow Wilson Award for Global Corporate Citizenship from the Woodrow Wilson Centre located in Washington, US. She is the first leader to receive an award in this category. In the same year, Kochhar was ranked 5th in Fortune’s list of ‘Most Powerful Women in Business outside the U.S.’.

Kochhar ranked 40th on India Today’s ‘High and Mighty Power List 2016’ in 2016. In the same year, she was 22nd in the Forbes Asia’s ‘50 Power Business Women List 2016’. She was also listed in Forbes list of ‘The World's Most Powerful Women In Finance 2016’ at number 10.