Posted on Nov 25, 2007

ICICI Bank: Fraud and Prejudice

Today, ICICI Bank is perceived to be the face of successful private banking in India. But how many of us know that this success is built upon aggressive use of unethical practices? Here is an instance that came to my notice recently.

1. My cousin wants to open an account at ICICI Bank at Cox Town, Bangalore. She approaches the branch with all documents required for opening the account (the ones that are required for verifying her identity and address) and cash required for minimum balance. To her surprise, she is told that the bank allows opening a new account only if she produces a cheque from an existing account in another bank. But what if she does not have an existing account? Her surprise turns to chagrin as she is told that there is nothing the bank can do and that it is their policy. Of course, the bank has a simple solution for those who are desperate to open an account with them  – open an account at a public sector bank (they dont have these policies), deposit your money there, get a cheque immediately, and present it at ICICI bank. Repeated questions about this convoluted procedure are met with the ultimate defence of corporate irresponsibility – “this is our policy, madam!”.

A few minutes of thought and research on the Internet exposes the rationale. Reserve Bank of India has issued the ‘Know Your Customer’ guidelines which require banks to validate the identity and other credentials of their customers before allowing them to open their accounts. ICICI Bank does not want to spend money doing this validation, so they just turn low-value customers away. Worse, they push these costs on to public sector banks by directing the 
customers to open accounts there.

This is not a new practise local to Bangalore. It is happening in other places too, and it has been happening for quite some time, as can be seen from this blog post at

All this, while ICICI Bank proudly presents their wonderful ‘Code of Commitment’ which goes ga-ga about how good they are to their customers. Here are some excerpts that are relevant in this context:

3.1 Before You Become a Customer
We will:
a. Give you clear information explaining the key features of the services and products you tell us
you are interested in;
b. Give you information on any type of products and services which we offer and that may suit your needs;
c. Tell you if we offer products and services in more than one way [for example, through ATMs, on the Internet, over the phone, in branches and so on] and tell you how to find out more about them;
d. tell you what information we need from you to prove your identity and address, for us to comply with legal, regulatory and internal policy requirements.

Account Opening and Operation of Deposit Accounts
Before opening any deposit account,
We will:
a. carry
out due diligence as required under “Know Your Customer” (KYC) guidelines of the bank;
b. ask you to submit or provide necessary documents or proofs to do so;
c. obtain only such information to meet with our KYC, Anti Money Laundering or any other
statutory requirements . In case any additional information is asked for, it will be sought
separately and we will specify the objective of obtaining such additional information. Providing
such information will be voluntary;
d. Provide the account opening forms and other material to you. The same will contain details
of essential information required to be furnished and documents to be produced for verification
and/or for record for meeting the KYC requirements;
e. Explain the procedural formalities and provide necessary clarifications sought by you while
opening a deposit account;

All a bunch of lies and false promises crafted by those trained in the greatest art of our day, the manufacture of truth. These lies contribute a lot to the perception that ICICI Bank is a great private bank that has redefined banking in India. It does not matter that this perception ends at urban boundaries; after all, in today’s India, you do not even exist if you are outside the urban context.