STRATEGIC PARTNERS
April 13, 2003
AHMEDABAD, India -- Spooked depositors with accounts at ICICI Bank rushed the bank's ATMs on April 11 following a rumor that the bank was experiencing problems with its cash liquidity.
According to a report by Indian Express Newspapers, the panic-driven withdrawals ended on April 12 after assurances from the Reserve Bank of India (RBI) confirmed ICICI's solvency -- but not before the bank experienced a run on cash.
Dileep Londhe, regional manager in-charge of ICICI's retail banking in Pune, Nashik, Aurangabad, Kolhapur and Nagpur, told the Express news service that the bank not only sent out extra cash from its vaults but also managed to get a "big chunk" from the RBI, Mumbai by April 12.
''Brinks Arya, who carry cash for ICICI bank, pressed double the number of armored vehicles to ensure the ATMs did not go dry,'' he said. Brinks also sent vans full of cash to Aurangabad, Kolhapur and Nashik to face the cash crunch.
ICICI Bank retail head (Gujarat) Raghu Nagarajan said that about Rs 23 crore (about $485,436) was withdrawn from ATMs and branches across the Indian state of Gujarat on April 11, when rumours about the bank's alleged financial problems were published in a local newspaper. Another Rs 65 crore (about $1.3 million) was withdrawn on April 12.
On April 13, however, following reassurances from ICICI itself and the RBI, customers began returning to deposit their funds. The bank also took the unusual step of remaining open on April 13 and April 14.
"We would like to reassure our depositors and customers that ICICI Bank is one of the premier banks in the country and there has been no adverse change in the financial position of the bank," said Kalpana Morparia, executive director, in a statement.
According to a report in the Business Standard, Gujarat depositors were understandably shaky because of the failure of 22 co-operative banks in the past two years.
