Communication in a Crisis ICICI Bank



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Introduction

The global financial crisis of 2008 that led to the collapse of US-based investment banking major Lehman Brothers had a huge impact on India’s second largest bank, ICICI Bank Ltd. (ICICI Bank). On September 16, 2008, a day after Lehman Brothers filed for chapter 11 bankruptcy in the US, Chanda Kochhar (Kochhar), MD and CEO, ICICI Bank, said in a press statement that the bank’s UK-based subsidiary ICICI Bank UK plc. (ICICI Bank UK) had just a 1 percent exposure to Lehman Brothers and that the bank did not therefore face any liquidity crisis

Industry watchers felt that while ICICI Bank had responded aggressively by coming out into the open and accepting its exposure to the crisis, the move had backfired since it triggered huge media coverage showing ICICI Bank’s exposure to the crisis. There were reports saying that the top management had sold their shares and the bank could face a huge liquidity crisis.........

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The subprime mortgage crisis in the US in 2008 led to several US-based investment banks going bankrupt. In addition to ICICI Bank, some other Indian banks such as State Bank of India, Punjab National Bank, etc. also had exposure to the investment banking firms in the US. These banks came under immense scrutiny from customers and investors since there were reports that they were facing a severe cash crunch........

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