ICICI Bank UT2

completed

The proposed project consists of a 15-year subordinated debt issue of up to $150 million to ICICI Bank Ltd. (ICICI Bank or the Bank), India’s largest private commercial bank with a market share of approximately 7.5% in terms of total assets. The project will support the Bank’s capital requirements to finance growth, especially in key areas such as rural banking and microfinance, insurance and international banking, as well as to meet the requirements of Basle II. The proposed investment, which qualifies as Upper Tier II Capital (UT2), will be structured as per the guidelines recently issued by the Reserve Bank of India (RBI) permitting banks to raise subordinated debt in foreign currency from foreign investors.ICICI Bank is a domestic AAA rated institution, which was incorporated in 1994 as a subsidiary of ICICI Limited. ICICI Limited was a development finance institution formed in 1955 at the initiative of the World Bank, the government of India and Indian industry representatives. ICICI Bank and ICICI Limited merged in 2002 to create to India’s largest private commercial bank. ICICI Bank is listed on the Mumbai and National Stock Exchanges as well as the NYSE. It has built up a formidable brand name and consumer banking franchise with a leadership position across the full range of consumer finance products. On March 31, 2006, the Bank had total assets of $56 billion and a net worth of approximately $5 billion. ICICI Bank provides a diversified range of financial services through its subsidiaries in life and general insurance, asset management, venture capital, and investment banking. Although ICICI Bank has been able to raise about $215 million equivalent UT2 in the domestic bond market in July 2006, it has approached IFC for an additional investment as it is desirous of diversifying its funding sources and investor base.This investment provides a window of opportunity for IFC to play a key role in promoting new, innovative banking products in India, and in developing the subordinated debt market.