ICICI back as Infy's preferred banker

ICICI Bank, the largest private sector bank in India, is back as the preferred banker for Infosys Technologies, with the technology firm doubling its deposits with the bank in the last three months.

The country’s second-largest software exporter had parked Rs 1,682 crore, or 11.37 per cent of its deposits, with ICICI Bank as on June 30, the highest deposits Infosys has currently in any bank.

ICICI Bank’s share in Infosys’ deposits has gone up, even as the software firm’s total deposits remained nearly the same during this period. Infosys’ balance in the deposit account stood at Rs 14,799 crore as on June 30, compared with Rs 14,318 crore three months ago.

Infosys had halved its deposits in ICICI Bank from a year ago to Rs 788 crore as on March 31 compared to the year-ago period, and shifted a major chunk of its cash reserves to state-run lenders like Punjab National Bank and Bank of Baroda. Infosys had reduced its deposits with ICICI Bank since the lender reduced interest rates on wholesale deposits. Infosys and ICICI Bank had both said the move followed the bank’s decision to cut wholesale deposit rates.

“We have been systematically reducing our reliance on wholesale deposits over the last two years. Accordingly, we do not quote high rates for wholesale deposits,” an ICICI Bank spokesperson had told Business Standard earlier this month in an emailed response to a query on why Infosys had reduced its deposits with ICICI Bank in the previous financial year.

In April, Infosys had named former chief executive officer and managing director and current non-executive chairman of ICICI Bank, K V Kamath, as the new non-executive chairman of the company.

It was not immediately known whether ICICI Bank has started offering higher rates on wholesale deposits. The bank did not respond to a query.

Infosys, however, maintained its choice of banks was primarily driven by the rate that was offered on deposits. “Our investments in fixed deposit accounts are guided by the yield we get from banks,” said V Balakrishnan, chief financial officer, Infosys.

Among public sector banks, Infosys has kept the majority of its deposits with Punjab National Bank. The software firm’s deposit with the bank stood at Rs 1,523 crore as on June 30, compared with Rs 1,493 crore a quarter ago.