ICICI financial liquidity sufficient: RBI

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Mumbai, Sep 30: In the wake of rumours regarding weak financial liquidity of ICICI Bank, the Reserve Bank of India has vouched upon ICICI bank stating that the bank has sufficient liquidity to meet the requirements of its depositors. RBI said,''the ICICI Bank has sufficient liquidity, including in its current account with the Reserve Bank of India, to meet the requirements of its depositors.'' RBI said it was monitoring the developments and has arranged to provide adequate cash to ICICI Bank to meet the demands of its customers at its branches/ATMs.

The ICICI Bank and its subsidiary banks abroad are well capitalised, the RBI said. In a statement, Bank Chief Executive Officer and Managing Director K V Kamath reiterated that the bank's financial position is sound.

Mr Kamath termed rumours regarding the financial position of the company as ''baseless and malicious''. The statement said ''ICICI Bank Limited is aware that rumours are being repeatedly circulated in certain centres regarding the financial strength of the Bank. The Bank states that these rumours are baseless and malicious.'' The ICICI Bank scrip lost a whopping 12 per cent at the BSE yesterday to end at 493.30, the lowest since July 21, 2006. The stock today rallied to be quoted at Rs 520 at 1315 hrs, up by 5.41 per cent, after the clarification from RBI and the Bank. The scrip had a 52 week high of Rs 1,465 on January 14 this year.

The absorption of the impact of current market conditions on investment portfolio valuation will not pose any challenge to ICICI Bank's capital position, it said.

Expressing concern over the possible impact on such rumours among its customers, the bank reitrated that it has a ''very strong capital position, having proactively raised Rs 20,000 crore (about USD five billion) in June 2007, almost doubling its capital base.'' The Bank had a networth of over Rs 47,000 crore (that is over USD 10 billion) and a capital adequacy ratio of 13.4 per cent on June 30, 2008, as against the regulatory requirement of nine per cent.

''This is among the highest levels of capital adequacy in large Indian banks and reflects the healthy capital position and comfortable level of leverage,'' the Bank said, adding, its banking and non-banking subsidiaries were also well-capitalised.

ICICI Bank has consolidated total assets of over Rs 484,000 crore (over USD 105 billion), which was diversified across a wide range of asset classes in India and overseas.

Referring to its profits, ICICI Bank said it made a profit after tax of Rs 4,158 crore (over USD 900 million) in FY-2008 and Rs 728 crore (over USD 155 million) in the first quarter of this year. This was due to the strong core performance, which more than offset the impact of adverse debt and equity market conditions in India and globally since the second half of FY-2008.

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