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N.S. Vageesh

CHENNAI, April 12

NERVOUS questions about the stability and soundness of ICICI Bank start cropping up in the office corridors in the early afternoon. Colleagues ask if their money is safe. "My father's savings is there. Should I ask him to pull it out?" asks another. Other associates in the banking industry call up to enquire about details.

These anxious queries stem from the television and print media reports of a "run" on the bank in Gujarat and pictures of long queues in front of branches and Automated Teller Machines (ATMs) there.

Exaggerated, as this reaction might seem, it is one of the offshoots of advances in technology.

Says the General Manager of a public sector bank "Earlier `runs' on banks were largely confined to a local area - maybe a branch or a city. Even then, the adage that bad news travels fast was true. But the advent of satellite television, e-mail and mobile phones has ensured that such news simply travels faster to every nook and corner of the country. Now you see such images on the screen and rush out to take what you can!"

Does the presence of so many ATMs add to a bank's vulnerability in such situations?

If one goes by that yardstick, ICICI has nearly 1,675 ATMs across the country. But officials discount this and point out that for ATMs there is a limit of around Rs 15,000 on cash withdrawals, whereas in a branch, you could theoretically draw your entire balance.

In any case, the ATMs are networked and the quantum of withdrawals is regularly monitored.

Officials say that as soon as the balance in a particular ATM touches a level of around Rs 50,000, an alert is sent to the monitoring centre for topping it up. (ATMs can normally hold up to Rs 25 lakh, depending on denomination.) A van is dispatched to that ATM to fill up the cash and the process normally takes about an hour. But even before this, ATMs, as a rule, are replenished every morning. The amounts could vary based on usage patterns and statistical models, officials say.

Enquiries with the local officials in various city branches of ICICI Bank in Chennai reveal a situation of calm. They haven't faced a run and it is business as usual, they say. In fact, withdrawals have been lower than what is normal for a weekend, they say. Today's drawals in Chennai across around 125 ATMs of the ICICI Bank were only around Rs 1 crore. This will be a long weekend with a number of banking holidays just ahead. Bank officials say they are well stocked and prepared.

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