Assaulted by rumors that the US financial crisis had landed ICICI Bank in a tight spot, the country's largest private sector bank —backed by the finance ministry and the Reserve Bank of India — moved quickly to assure depositors that their money was safe and there was no reason to fear a run on the bank.

In the morning, security guards at a number of ICICI ATMs reported an increase in the number of customers arriving to withdraw cash through Monday night and Tuesday morning. TOI offices also received several calls from readers asking if ICICI was indeed in trouble, and if they should withdraw their money.

ICICI Bank chief K V Kamath cancelled his Europe visit to dig in his heels and stem the rising tide against the bank.Describing the rumours as ''baseless and malicious'', he accused market manipulators of hammering the bank's stock (by 14% on Monday). On the back of assurances from the finance ministry and the RBI that the bank was ''well-capitalised'', Kamath managed to create enough investor confidence for the scrip to jump to Rs 534.85 from a low of Rs 458 in the morning.

In its statement, RBI said that ICICI Bank has sufficient liquidity, including in its current account with the central bank to meet the requirements of its depositors. RBI added that 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 and ATMs.

In the morning, the bank faced unusual withdrawal of cash in some parts of the country, because of rumours about its financial stability. But the presure abated, as RBI and finance ministry stepped in to scotch the rumour.

Kamath also issued a statement on the bank's financial health and said that any rumour about the bank's financial strength is baseless and malicious. Demanding a probe behind spreading of rumour to hammer down of its shares, ICICI Bank Managing Director and CEO K V Kamath said, "Finance Minister P Chidambaram shares our concern... he is very

supportive." Asked to name those behind the rumours, Kamath said, "I do not want to comment on this... it is for the market regulator and the government to find out."

Kamath said the bank has a very strong caspital position with a capital adequacy ratio of 13.4% as against the statutory requirements of 9%. In june 2007, the bank had raised Rs 20,000 through a public issue of its shares in the international market. This took the net worth of the bank to Rs 47,000 crore.

As against this, the bank has invested only $ 3.5 billion in the banks and the finance companies in UK, where it has a subsidiary company. It also has loan portfolio of $ 4 billion, where there is no NPA. Besides this, it has cash equivalent of $ one billion. Joint MD and CEO Chanda Kochhar said that capital adequacy ratio of its UK operation is 17.4%. So, there is no chance of its UK subsidiary to default, she added. RBI also in the statement said the ICICI Bank and its subsidiary banks abroad are well capitalized.

The 98% of the investments of $ 3.5 billion are rated investment grade and above, with 89% rated 'A'. Now a day, as banks fortune change overnight and file bankruptcy in UK and US particularly, the apprehensions are being raised of entire $ 3.5 billion portfolio become non-performing. Chanda Kochhar, refuting any such situation to arise, said that even in that condition bank would be able to meet its all the liabilities, including that of depositors. She said that ICICI Bank is overtly capitalized bank and an investment portfolio of $ 3.5 billion (Rs 16,000 crore) going sour will not affect its financial health much.

Talking about, its India operation, she said that the bank has a deposits base of Rs 2,34,000 crore and consolidated total assets of Rs 4,84,000 crore. The bank has made a profit of Rs 4,158 crore in 2007-08 and Rs 728 crore in the first quarter of the current year. The bank has a net non performing assets at 1.5% of performing assets, which is one of the lowest in the banking industry in the country.