London, Sept. 10: ICICI Bank, one of the success stories of Indian banking in the UK, reacted angrily today to a Reuters report which suggested that it had been forced to suspend operations of a high interest account.
Rohit Bhatnagar, senior marketing manager of ICICI in Britain, told The Telegraph: “I am getting in touch with Reuters to ask them to correct their report. I don’t want a panic among our customers.”
The confusion appears to have been caused by very high demand for the 5.4 per cent interest that the bank is offering ' this is higher than anything equivalent available currently in Britain.
“We are getting between 100 and 300 applications a day,” said Bhatnagar. “The product has not been suspended.”
He stressed: “The product is still available on our website, www.icicibank.co.uk. Just because we have stopped the marketing campaign does not mean we have suspended the product. There is enough awareness of the product.”
ICICI has very quickly become a high profile bank in Britain, at least in Indian circles. It recently added branches in Leicester, Manchester and Southall to the head office it has in Knightsbridge in London not far from Harrods.
It has teamed up with Lloyds TSB and offers customers rupee mortgages in India and even offers to find them suitable homes and commercial properties in the country.
According to today’s Reuters report, “British savers searching for a market-beating rate applied in such large numbers for an account offered by Indian bank ICICI that the bank was forced to stop marketing the product as it could not keep up with demand.”
It said: “The Internet-only 'Hisave' account generated so much interest that the bank asked to have its listing removed from Moneysupermarket, a spokeswoman for the financial search engine said on Friday.
“The bank first came to the attention of Britain's beleaguered savers in July when it launched Hisave with a rate of 5.4 percent AER (annual equivalent rate). At the time, British banks and building societies were anticipating the Bank of England's August quarter-point base rate cut to 4.5 percent with cuts to their own savings rates.
“ICICI paid for an initial promotion listing for two weeks on Moneysupermarket, but then asked to pull it. The Hisave account was listed again on August 15 and the bank asked for it to be removed one week later.”
Reuters quoted the Moneysupermarket spokeswoman as saying: “They've been on the site twice and requested to come off both times. What we can presume from that is it's to do with volume.”
There is also a quote from Anand Kumar, ICICI's head of retail banking, who told Reuters, that the bank got a very good response when it first listed the account on Moneysupermarket so its priority was to deal with the outstanding applications before marketing again to attract new ones.
Kumar also confirmed that ICICI was receiving between 200 and 300 applications a day and said: "We'd like to give customers the service they require so we will be suspending our marketing activities for 15 days -- two months maximum. After that we'll go for a big marketing campaign when all the operations are in place."
Most damaging for ICICI is that Martin Lewis, moneysaving expert and author of the best-selling 'Money Diet', did have the account as his top pick, but he had now withdrawn his endorsement..
“It's a clean account with no tricks, with the rate guaranteed to be at least 0.25 percent above base rate until December 2007," he said.
However, he had received so many complaints from people who had tried to open accounts but had received poor service that he has updated his advice.
“I've never seen poor feedback on this scale so for the moment I'm suggesting people should avoid it," Lewis told Reuters. "It simply never expected this level of demand and cannot cope.”
He added: “It's opening accounts not running them that's causing problems. It's safe and paying a good rate but it is completely and utterly out of its depth. They will have received tens if not hundreds of thousands of account applications which is enormous for a small organisation."
Bhatnagar said: “We have some differences with the statements attributed to Moneysupermarket, in the news story and we'd like to probe the matter further. We are taking up the matter with Reuters.”
It remains to be seen whether Reuters will amend its report in the light of the objections from ICICI.