Bank looks to raise Rs 4,000 cr from CRR cut

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ICICI Bank on Friday said it will get Rs 4,000 crore from the Reserve Bank following cut in cash reserve ratio, but ruled out slashing lending rates for its customers.

RBI’s decision to cut CRR is basically to tackle the liquidity position in the system and would not have any immediate impact on lending rates, ICICI Bank’s joint managing director and CFO, Chanda Kochhar.

“Liquidity is tight as such in the system...Rs 60,000 crore being released in the system after RBI’s CRR cut decision would improve the situation... (Out of this) Rs 4,000 crore would be released for us,” she said.

Immediately, it would have no impact on lending rates, she added.

Kochhar debunked run-on-bank rumours; says vested interests were hammering down share price.

On rumours that the current global financial crisis might lead to the government asking for merger among the country’s banks, Kochhar said she does not see any such situation. Earlier in the day, a finance ministry official said the government does not see any problem with the bank. Stressing that ICICI Bank has a strong liquidity position, Kochhar told agencies over telephone from Mumbai that the bank’s market value is plummeting because the perception was getting destroyed by rumours.

Kochhar also debunked the reports that ICICI Bank’s high cost borrowings was aimed at augmenting its liquidity position and meet its obligations.

“Call money market rate has gone to as high as 24 % and everyone is borrowing at these high rates,” she said, adding there is no cause for panic in this regard.

“I want to re-assure all depositors there is nothing like run-on-bank. Our financial position continues to be strong, whether in form of net worth, capital adequacy ratio or current liquidity position,” she asserted.

The bank has “adequate rupee liquidity in the context of the current environment,” she said

Pointing out that ICICI Bank has never used rupee funds for its international growth initiative, she said that the bank has liquidity of Rs 12,000 crore in overseas units.

Kochhar further said the bank has assets of Rs 4.8 lakh crore as on June 30, 2008.

Asked about the outcome of the Sebi probe on the hammering of stock prices, Kochhar said, “we will wait for the findings...it takes time for such inve-stigations.”