Indian central bank acts on depositors' cash panic

By 3 p.m., most of the bank's ATMs in the southern Indian city, which is one of the hubs of India's IT industry, had lines of one to two hundred anxious customers pulling as much cash as they could from their accounts.

"I was worried about the rumors and did not want to take chances," said Venkat Ram Reddy, a software engineer. "I had to be cautious."

Rashmi Sinha, a housewife in her thirties, said she rushed to get her money out after television news reports showed hundreds of people lining up at local ATMs.

"It was a natural instinct to run to the ATM and take out the money," she said.

Some ATMs ran out of cash, locals said.

It's not clear why the panic centered in Hyderabad.

India's central bank stepped in Tuesday to quell concerns, saying in a statement that ICICI had sufficient liquidity to meet depositor needs.

"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/ATMs," the central bank said.

ICICI President K.V. Kamath also attested to the soundness of the bank's fiscal position Tuesday, reiterating that its U.K. subsidiary has "zero exposure" to U.S. subprime credit, although it did hold $81 million in Lehman Brothers' bonds--an amount the bank says adds up to less than 0.1 percent of the group's total assets.