Q: Let us move on to another issue which is causing some amount of alarm to your larger investors, maybe not to your retail investors, the fact that there does not seem to be too many buyers of ICICI bonds in the international market the way the CDS (credit default swap) rates have spiked up internationally. How alarming or significant or material could that situation be for you?

A: Let me put that also into context. I think widening CDS or widening spread on a bond is critical to an institution when there is a very large amount of these instruments coming up for either repayment or rollover.

I can again categorically tell my viewers and the large investors that we have no such large requirements coming in. Our requirements for the next six months or so in the context of our global book is less than a billion dollars, which is peanuts compared to the size of operations that we have and the sort of situation that is there in other global institutions where probably 70–80% of their book is coming up for a rollover in that period. We are talking of a fraction not even a percent or two of our book coming up for rollover as a bank.

As a nation, we cannot believe that this is an amount that we can rollover. I am surprised. So, the situation in our context in the CDS spread widening has nothing to do as an implication on our health. The implication will be there, if indeed, there is a large pool of bonds, which need redemption or which need to be rolled over. That is not so in ICICI Bank’s case.

Q: One criticism which has been levelled by many investors of ICICI Bank is that “you are reacting to news flow or your communication to your investors and depositors has been reactive rather than proactive.” They single out the instance of Lehman Brothers where the market started talking about it and reacting to it in terms of your price before ICICI Bank could communicate that and only when the stock fell did ICICI Bank come out and speak about the Lehman exposure. They would like it the other way round. What is your observation to that criticism?

A: No bank goes about sharing its entire portfolio with the market place. No bank does it and no bank can do business in that manner.

Having said that if there is an event which is of worry, then the bank will articulate what is its position and that is what we will do. I reiterate what S&P had said to pick a single credit, and say that this is going to cause the downfall of a bank and it is absolutely out of context and that is what is really happening in the market. In such an event, we will have to keep responding to every rumour. The problem here is that one does not know what the next rumour is. Yesterday, there was a rumour that our partner Prudential of the UK was going to walk out on ICICI Bank which is absolutely baseless and we have had immediate confirmations from our UK partners scoffing at this. I think that is what one has to be always on the look out for. How can one be proactive to such a rumour?

Q: What is your plan from hereon because clearly after all that has happened in the last fortnight, it seems that ICICI Bank is now vulnerable to this kind of rumour mongering and people seem to believe what has been going around. Last night, there was another fresh rumour as you have just pointed out. What do you do to salvage this kind of sentiment and image which has been hurt?

A: I think a part of the problem is global problem. This problem is there with every global bank in a sense that nobody is comfortable with any bank’s given standing. Other governments have given reassurances about the health of the banking system, not necessarily any bank. In some countries, governments have gone to the extent of guaranteeing the deposits of all depositors and customers.

Each country has reacted in a different way. So, this is nothing peculiar to what is happening around the world. It is only a question that in India we have been picked upon this particular instance.

My own response is that we have a communication task and we are standing up to that task and we will stand up to the task. We, then, have to look at the media to actually be able to communicate what is the true position. Then we need to look up to the government to communicate the true position in a larger systemic context of the economy because our economy is different from what is happening around the world and in the context of the systemic health and if necessary in the health of an individual institution within that system––be it in banking or any other field.

Finally, it is then also the central bank which comes in to provide this sort of assurances about the systemic health. To me this is a sort of action that can be taken. Once there is realization that there were probably clear steps in terms of attempting to do certain things which ought not to be done––once these steps are taken I think things will cool down.

In our own case, we certainly are in a position to say that our customers stand by with us and let me give this assurance to our customers––your bank is sound. We are extremely well capitalized with 150% of what is required. We are profitable and we will continue to be in business.

Q: I will ask you to further reiterate what you have been saying for the last twenty minutes, under the worst imaginable case possible according to you there is no problem that ICICI Bank envisages to the extent of that it goes down or depositors get hurt, etc. that is a completely unlikely or impossible scenario in your eyes.

A: Given our capital, financial health in terms of profitability, our liquidity, the solvency ratios that we are earning and the way we run our bank, I am confident that this bank is amongst the soundest financial institutions in the world and I have that trust in the bank and I am sure our customers have that trust in me.