RBI Says that ICICI bank is having sufficient liquidity and the bank is financially strong so depositors dont need t worry about the banks liquidity.
ICICI Bank and its subsidiary banks abroad were well capitalised, the RBI assured, hours after Chief Executive K V Kamath came out with a statement, saying rumours being repeatedly circulated about ICICI’s financial strength were baseless and malicious.
"There are reports in some sections of the media that based on rumours regarding the financial strength of ICICI Bank, depositors are withdrawing cash at its ATMs and branches in some locations," the central bank said.
"It is clarified that the ICICI Bank has sufficient liquidity, including in its current account with the Reserve Bank of India, to meet the requirements of its depositors," it said.
"The Reserve Bank of India is monitoring the developments and has arranged to provide adequate cash to ICICI Bank to meet the demands of its customers at its branches/ATMs."
Shares in ICICI Bank rose to be up more than 5 percent after the statement. They had opened trade on Tuesday down 7.2 percent at their lowest level in more than two years.
Kamath’s statement earlier in the day was the latest in a string of announcements the bank has issued about its health in the past two weeks.
"ICICI Bank Ltd is aware that rumours are being repeatedly circulated in certain centres regarding the financial strength of the bank. The bank states that there rumours are baseless and malicious," Kamath said.
"The absorption of the impact of current market conditions on investment portfolio valuation will not pose any challenge to ICICI Bank’s capital position," he added.
The bank’s capital adequacy ratio was at 13.14 percent on June 30, and it had a net worth of more than USD 10 billion, he said.
Shares in ICICI have fallen by more than 25 percent in September and almost 60 percent so far in 2008 on worries about its exposure to global financial turmoil.