Subprime Tsunami on Indian Shores: Crisis Hits ICICI Harvard Case Solution & Analysis

Banks with exposure to complex financial instruments in high-debt surroundings were considered especially exposed. ICICI Bank – India’s biggest private sector bank with optimum international exposure amongst Indian banks was affected by rumours regarding its exposure to Lehman assets. Solvency apprehensions drove its depositors to withdraw huge sums of money and also the stock value of the bank started to erode.

ICICI's management reacted to the catastrophe by beginning an extreme public relations effort: the bank released advice on its vulnerability and supported its position through media looks of statements and its top executives issued by rating agencies, regulators, and also the government of India. The bank accentuated the strength of its balance sheet, the limited exposure to a healthy cash reserve ratio, adequate provisioning, along with high-risk assets. It alleged malaise and rumour-mongering by market intermediaries as the reason behind the catastrophe and denied any threats to its solvency. When another episode of stock collapse and customer withdrawal started the public relations effort had just concluded. The case gives pupils an opportunity to evaluate crisis communication attempts in the age of new media and its own connection with company reputation. The pupil, in the function of a PR consultant, must determine why the attempts failed. What else might have been carried out to restore trust?

Subprime Tsunami on Indian Shores Crisis Hits ICICI case study solution


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