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Should You Trust Icici Bank?

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September 26, 2006

Should you trust ICICI Bank?

Almost exactly a year ago, after countless enquiries from our readers about the mystery bank called ICICI, we took a closer look at who this new entry to the UK savings market was, and why they could offer a rate of 5.4%.

A year later, (and with the rate down to 5.15%), I'm still getting emails from people asking why ICICI don't appear in This is Money's best savings rates tables, when they do appear in other tables and are recommended by other financial commentators.

There are several reasons. The main one is that, despite having a presence in the UK for three years, ICICI Bank still do not comply with the UK Banking Code, which sets minimum standards for customer service. The second reason - related to the first - is that there is a load of anecdotal evidence that customers are still struggling to receive passwords, to have money transfers happen on time and of people generally tearing their hair out trying to get their savings sorted.

In short, despite the good rate and the fact that others recomend ICICI Bank purely on their high rate (which is undoubtedly a 'best buy'), we're not comfortable recommending that our readers put their hard-earned cash somewhere that so many others are frustrated with. Many readers have told us that they've opened an account, only to close it down a month later having lost a month's interest because it's taken so long to get the account organised.

It's important to point out that ICICI Bank is regulated by the FSA, which means most of your cash up to around £32,000 is protected, so you won't lose your money it if the bank hits financial difficulty. You might just lose sleep trying to get your money transferred.

Of course, we can only go on what our readers tell us, so decide for yourself. Here's what our readers have to say, and let us know if you think we're right in not recommending ICICI Bank just the at the moment by posting a comment below.

- Sascha Hutchinson, This is Money

http://anmblog.typepad.com/this_is_money_b...d_you_trus.html

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It's important to point out that ICICI Bank is regulated by the FSA, which means most of your cash up to around £32,000 is protected, so you won't lose your money it if the bank hits financial difficulty.

I'm not sure that is actually true .

This guarantee hasn't (I am probably wrong) been tested by a member bank failing and the "fund" being used to partially refund the investors .

Until a safety net is tested it shouldn't be relied on .

In this case the safety net relates to banks and the Government so anything could happen IMHO .

Very sad to say .

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September 26, 2006

Should you trust ICICI Bank?

Almost exactly a year ago...

[...]

- Sascha Hutchinson, This is Money

http://anmblog.typepad.com/this_is_money_b...d_you_trus.html

From Money Saving Expert .com:

ICICI's HiSAVE* internet account pays 6.05% and is a totally clean account with no catches or short-term bonuses. ICICI, the UK subsidiary of a giant Indian bank, has been in the UK market for nearly two years and stayed a consistent top payer. At its launch, there were customer service problems due to massive demand, but feedback is now generally good.

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