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ICICI Bank to order probe into panic withdrawals
Monday, 14 April 2003, 19:30 IST
NEW DELHI: ICICI Bank, India's second largest bank and the largest in the private sector, Monday said it would soon order a high-level probe into what triggered panic withdrawals from its branches following rumours that it was on the verge of collapse.
"We will be taking a final view on initiating a probe to find out reasons that led to large-scale withdrawals in the next one or two days. We want to get to the bottom of the incident," said a senior official of ICICI Bank.
State Bank of India is the country's largest bank.
"The situation has now completely become normal. We are getting very positive reports from various regions," the official, who didn't want to be named, told IANS on the telephone from the bank's headquarters in Mumbai.
Tens of thousands of jittery customers across India scrambled to get their money out of ICICI Bank Friday and Saturday on rumours that the bank had plunged into deep financial crisis. The rumours sent scores of depositors scurrying to ICICI Bank ATMs in several cities across the country.
The bank issued frantic denials saying it was in sound financial health but the unprecedented run continued, primarily in major cities and all across Gujarat, where the rumours originated.
The Reserve Bank of India (RBI), the country's central bank, rallied to ICICI Bank's rescue, saying the latter's financial position was sound and that it had sufficient liquidity to meet the demands of its depositors.
"The withdrawal was a little more than normal on Friday and Saturday. On Sunday, things became completely normal. And today (Monday), we are getting reports that customers are coming back to deposit their money," the ICICI Bank official said.
The official pegged the total withdrawals on Friday and Saturday at a little over 
1 billion.
The bank has kept all its branches open in Mumbai, the country's financial capital, and major cities in Gujarat, which witnessed maximum withdrawals, on Monday despite it being a national holiday.
"We are keeping our branches open today in select cities to allay customer fears. We have also asked our officials in other regions to keep the banks open today if it is necessary," the official said.
All major Indian financial operations, including money, foreign exchange, bond and stock markets, are shut Monday for the birth anniversary of B.R. Ambedkar, who had drafted the Indian constitution.
Over the last five years, the ICICI group has been transformed from a long-term lender to big companies into a virtual universal bank providing home, auto and personal loans, credit cards and insurance.
ICICI Ltd., the financial services company, was merged with ICICI Bank in 2001 to make the latter India's first universal bank, or supermarket offering all types of financial services.
The New York Stock Exchange-listed ICICI Bank last week received approval to set up an offshore branch in Singapore and a representative office in Shanghai, China.
Although the bank has representative offices in the U.S. and Britain, a Singapore branch would be its first offshore branch.
Source: IANS
1 billion.
The bank has kept all its branches open in Mumbai, the country's financial capital, and major cities in Gujarat, which witnessed maximum withdrawals, on Monday despite it being a national holiday.
"We are keeping our branches open today in select cities to allay customer fears. We have also asked our officials in other regions to keep the banks open today if it is necessary," the official said.
All major Indian financial operations, including money, foreign exchange, bond and stock markets, are shut Monday for the birth anniversary of B.R. Ambedkar, who had drafted the Indian constitution.
Over the last five years, the ICICI group has been transformed from a long-term lender to big companies into a virtual universal bank providing home, auto and personal loans, credit cards and insurance.
ICICI Ltd., the financial services company, was merged with ICICI Bank in 2001 to make the latter India's first universal bank, or supermarket offering all types of financial services.
The New York Stock Exchange-listed ICICI Bank last week received approval to set up an offshore branch in Singapore and a representative office in Shanghai, China.
Although the bank has representative offices in the U.S. and Britain, a Singapore branch would be its first offshore branch.
Source: IANS