ICICI Bank Bankrupt Rumours Send Depositors Running To ATMs To Withdraw Money

by Trendy

The ICICI bank is India’s largest private sector bank. The bank has assets worth $100 Billion. A wild rumour that ICICI Bank was going bankrupt due to the subprime mess of the US market started floating around India today. As a result, a large number of ICICI customers rushed to the bank’s ATMs to withdraw all their deposits. A local newspaper is said to be the source of the rumour. When people read stuff like this in a newspaper, they assume that it has to be true. But the fact is that this newspaper report was far from accurate and caused the widespread panic among customers of ICICI bank and other private sector banks.

ICICI was quick to respond to rumours and said that the bank’s financial health was good. There seems to be no reason for customers to worry and withdraw their deposits.

ICICI Bank said that its UK subsidiary, which was in the news a few days ago over concerns about its investments in the instruments of the bankrupt Lehman Brothers, has no exposure to the US subprime credit. The subsidiary’s non-India investment book has been estimated at $3.5 billion, and about 89 per cent of those investments are rated A- and above by Standard & Poor’s, Moody’s and Fitch.

“Only about 18 per cent of ICICI Bank UK PLC’s non-India investment book has exposure to the US. The bank has a total balance sheet size of $8.5 billion and has zero non-performing loans on the balance portfolio of $3.9 biilion,” an official statement by ICICI Bank said.

Here is a video of Chandra Kochhar, Joint Managing Director Of ICICI Bank, dismissing the rumours and stating that the ICICI bank is in good health.


VideoGully

ICICI shares were battered on Dalal Street. The bank’s shares fell more than 12% on the Bombay Stock Exchange (BSE). The rejection of the Bailout bill HR 3997 by the U.S. House Of Representatives will add more fuel to the fire and is likely to help continue the slip of stock prices of financial institutions.

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