ICICI - safe - RBI

Country's leading private sector lender ICICI Bank, whose shares tumbled by 20 percent on Friday, has a high capital adequacy ratio of 13.97 percent, well above that of State Bank of India (SBI) and HDFC Bank during 2007-08, says a RBI report.

The capital adequacy ratio of the ICICI Bank, according to the central bank's recent profile of the Indian banking industry, was also well above the industry average of 13 percent.

As against the Capital to Risk Weighted Assets Ratio (CRAR) of the ICICI Bank at 13.97 percent, the SBI had a CRAR of 12.64 percent and HDFC 13.60 percent.

CRAR reflects the ability of a bank to deal with loan defaults, and as per the RBI guidelines, every bank is required to maintain capital adequacy ratio.

The shares of the ICICI Bank during the last week went down by 27.83 percent on the Bombay Stock Exchange to close at Rs 364.

According to the RBI analysis, CRAR of private banks at 14.30 percent for 2007-08 was higher compared to the PSU and foreign banks.

The average CRAR of the nationalised banks stood at 12.10 percent while that of foreign banks at 13.10 percent for the year 2007-08. State Bank of India and its associates had an average CRAR of 13.20 percent, with SBI's capital adequacy ratio stood at 12.64 percent, below the group average.

Among the nationalised banks, Canara Bank's CRAR at 13.25 percent was higher than the industry average.

The CRAR of foreign banks such as Standard Chartered Bank, HSBC and Citibank stood at 10.59 percent, 10.59 percent and 12 percent respectively, below the industry average.