The country's largest lender, ICICI Bank came forward to assure depositor that their money was safe and there was no reason to panic. There were rumours that the US financial crisis had landed the bank in a tight spot.

However, ICICI Bank said rumours that were being repeatedly circulated about its financial strength were "baseless and malicious", saying it had a very strong capital position.

In a statement, Chief Executive K.V. Kamath said ICICI's banking and non-banking units were well capitalized and the impact of the current market conditions on its investment portfolio would not pose any challenge to its capital position.

There was an apparent increase in the number of customers withdrawing their money through the bank's ATMs from Monday night and Tuesday morning.

In order to handle the rising tide against the bank, the bank's chief, Mr Kamath cancelled his Europe tour and confirmed that a fall in the bank's stock on Monday was due to market manipulation. ICICI Bank shares which tumbled 12 percent on Monday, bounced back by 8.42 percent to close at Rs 534.85 on october1 after the RBI issued a statement to clarify the bank's financial position.

The Reserve Bank of India clarified that ICICI Bank had sufficient liquidity, including in its current account with the apex bank to meet the requirements of its depositors.

"The Reserve Bank of India is 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," the RBI stated. "ICICI Bank and its subsidiary banks abroad are well capitalised," the RBI added.

Kamath pointed finger at some unnamed entities for spreading rumours about his bank's financial well-being. He refused to identify these manipulators of ICICI Bank's stock over a period but said he has sought a probe into stock price manipulation by the market regulator SEBI. "Finance Minister P Chidambaram shares our concern... he is very supportive," said the CEO.

Kamath confirmed that the bank has a strong capital base with a capital adequacy ratio (CAR) of 13.4 percent as of June 30, more than the minimum 9 percent required by regulators. "This is among the highest levels of capital adequacy in large Indian banks. This reflects the healthy capital position and comfortable level of leverage. Its banking and non-banking subsidiaries are also well-capitalised," said a bank statement.

In June 2007, the bank had raised Rs. 20,000 crore through a public issue of its shares in the international market. This almost doubled its capital base and took the net worth to over Rs. 47,000 crore.