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ICICI – Moneyfacts' stance

ICICI – Moneyfacts' stance

Category: Savings

Updated: 31/10/2008
First Published: 27/07/2007

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Savers in the UK today can take advantage of a wide range of high interest accounts, and the cream of the crop can be found right here on Moneyfacts.co.uk in our Best Buy tables. However, many of you have been contacting our savings department asking why we exclude ICICI's HiSAVE account from our charts.

What's the deal?

ICICI is one of India's largest banks, second only to the State Bank of India. Established in the 1960s it has grown enormously over the past few years, and now has over $55 billion of assets under management. In 2003 the bank began trading in Britain, initially serving the UK's Indian community. In February 2005, ICICI launched its HiSAVE savings account, an internet-only savings account that currently offers UK savers an attractive rate of 6.13% (6.30% AER). Compared with other savings accounts, ICICI's offering ranks amongst the best available.

So why aren't they included in your Best Buy charts?

Well, to date, ICICI is not a member of the Banking Code. Traditionally, Moneyfacts has always required that every institution listed to be a member of the Code, because it sets out certain standards of good banking practice for financial institutions to follow when they are dealing with personal customers in the United Kingdom.

Why aren't ICICI a member of the Code, and should I be worried?

Our understanding is that ICICI complies with virtually the entire Banking Code, however it has so far been excluded from membership because its debit card does not comply with a specific regulation.

The Banking Code states that:

"All subscribers must have arrangements in place to allow customers to choose or change their PINs. This is normally by way of ATMs, but could be by any other secure method".

We understand that the bank is currently in talks to provide a chip and PIN card for its customers, and is in discussion with the Banking Code Standards Board to become a member.

Is this relevant?

Not to HiSAVE customers. Because HiSAVE is simply an internet savings account it doesn't come with a debit card. We are told the PIN issue only related to its bank accounts, which are mainly held by its branch customers from the UK's Indian community.
So is ICICI excluded from the Banking Code on a technicality?

Looks like it to us

But are my savings safe?

Like all banks regulated by the Financial Services Authority (FSA), ICICI is protected by the Financial Services Compensation Scheme (FSCS). This means that should ICICI (or any other financial institution covered by the FSCS) face financial difficulty, the whole of the first £2,000 deposited is covered, as is 90% of the next £33,000.

So where next?

Moneyfacts is committed to you, the consumer, and as such we will continue to provide you with an independent and impartial service to help you make informed decisions on your personal finances. The real dilemma that has to be solved is whether or not to continue to exclude ICICI's HiSAVE savings account from our savings Best Buy selections.

In order to make a decision, Moneyfacts is currently reviewing the following:
  • Is it fair that high paying accounts like ICICI's HiSAVE are excluded from selection because one aspect of the institution's operation doesn't comply with the Banking Code, but poor interest paying accounts (such as Halifax's 1.36% Liquid Gold) do?
  • Does the Banking Code penalise foreign institutions, new entrants and smaller providers from offering innovative new products and expanding their range?
  • Furthermore, are the current Banking Code's rules in the consumers' best interest, and does the Code itself need a revamp?
  • Concerning ICICI, how much longer must consumers wait before they iron out the problems surrounding its debit card and are finally admitted into the Banking Code?
  • In addition, ICICI only has a handful of branches across the UK. Does this detract from the appeal of its HiSAVE account with regard to customer service, should any problems arise?
How you can help:

Why not send us an email with your thoughts on the ICICI debate to feedback@moneyfacts.co.uk.

We will publish the results of our findings online, and in the September issue of Moneyfacts magazine

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.