ICICI Bank Rumors

Everybody is well aware of the recent rumors spread wide across the country about ICICI bank going bankrupt. ICICI is formerly known as Industrial Credit and Investment Corporation of India and is one of the largest private sector banks in the market today. This is not only the largest private sector bank but is also the largest issuer of credit cards in India. The bank is expanding in overseas market and as everybody is aware of the stock market’s ups and downs and the capital crunch, suddenly news came that this multinational bank is soon going to get bankrupt. This news has created havoc in the country as people have a lot of savings and shares of this bank which was said to have a good amount of liquidity. As the news spread across the world, the bank came to know that there are some brokers sitting in Mumbai were including in these kinds of baseless rumors and are raising doubts in the minds of people about the financial health of the bank. Moreover, above this, there were rumors that some of the members of the top management of this bank have been selling ICICI bank shares in the last few days. This spread more panic in the share market. According to the news, the ICICI bank said that the bank has not been majorly impacted owing to the exposure of Lehman brothers’ senior bonds. It says that the bank has enough liquidity.

The bank later filed a complaint against the brokers and the websites which are creating a panicky situation against ICICI bank. This complaint was filed before an additional police commissioner. The bank said that people are spreading the news to gain benefit by harming the bank’s reputation. These days’ newspapers are filled with the information on the financial health of this bank. On the other hand the Reserve Bank of India (RBI) has already said that ICICI bank has sufficient liquidity in order to fulfill the needs and requirements of the depositors and that of the bank as well. Apart from this the Finance Minister P Chidambaram and other regulators such as SEBI and RBI got in the financial matters and said the bank is completely safe. After the rumor spread, people came out of their houses and offices and there were long queues waiting for cash withdrawal from the ICICI ATM’s. The spreading of these rumors was felt a part of new economic terrorism in the country spreading across in terms of these rumors. After the rumor spread across the bank shares went down by 17.3 percent at Rs 375.

Finance Minister P Chidambaram said “I think that some people are giving credence to rumors and unfounded apprehensions. I maintain and I repeat all our banks are well-capitalized and well regulated. No Indian depositor need be apprehensive”. Moreover, the ICICI bank CEO K.V. Kamath told NDTV Profit television that “We are a healthy institution and significantly over-capitalized. We are profitable and we will continue to remain in business and be profitable. That is a promise to my customers.” He also said that the ICICI banks UK subsidiary have been checked and there is nothing to panic about your deposits and monetary worth. These comments were basically given to various new channels in order to calm down the investors. After this the bank shares slid 44% over four weeks.

A text message has been recently sent to all the bank’s customers, telling them that the bank has good amount of liquidity and one should not listen to these rumors that are spreading against this multinational bank. Later, the statement came from the central bank came saying that the bank and all its deposits are safe. The Finance Minister P Chidambaram has already told the media and the public that All Indian Banks are safe.