ICICI's books 'fine' says RBI; ICICI files complaint against rumour mongers

13 October 2008

The Reserve Bank of India (RBI) has said that an inspection of the books of ICICI Bank and that of its subsidiary in the UK has not uncovered anything that could be a cause for alarm.

Speaking to the Business Standard, RBI deputy governor has said that the central bank inspected the books of accounts of ICICI Bank and ICICI Bank's subsidiary in the UK and has found ''nothing to worry about.'' He said ICICI Bank has maintained sufficient liquidity of around Rs5,000 crore, evidence of which is found in the fact that the bank has been an active lender in the call money market.

ICICI Bank had slowed its retail lending over the past few months on account of interest rates going up and a rise in its delinquency levels. The bank's net non-performing assets were estimated to be around 1.83 per cent of advances at the end of the June 2008 quarter.

According to reports, ICICI Bank has a net worth of around Rs47,000 crore, and its statutory liquidity ratio (SLR) is 26 per cent. The bank's capital adequacy ratio is 13.42 per cent, which means that around half of the bank's deposits are covered by the SLR, cash reserve ratio and capital.

For its part, ICICI Bank has decided to respond aggressively with rumour mongers who are spreading fears that tantamount to ''economic terrorism''. It has filed complaints with the economic offences wing (EOW) of the Mumbai and Coimbatore police, accusing some brokers of rumour-mongering with the intent to hammer its share price and spread panic among its investors and depositors.

Ahead of the weekend, ICICI bank had suffered heavy losses on the bourses as a result of rumours that it could fall prey to the global credit crisis on account of its exposure overseas. In its complaints with the Mumbai and Coimbatore police, ICICI has said that a broker or sub-broker was spreading misinformation via text messages, or SMS.