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News Release

January 07, 1999

In preparation for its next issue of ICICI Safety Bonds, scheduled to open on January 21, 1999, ICICI has taken a decision to offer the same interest rates as it had in the previous issue. Contrary to speculation in the market, following the reduction in small savings interest rates, ICICI has taken a view that in the short-term, interest rates are not expected to change significantly. Therefore, household investors should continue to have an opportunity to plan their finances while availing of the attractive returns.

In the last Safety Bonds issue in December, the interest rate for a five-year Regular Income Bond, with annual interest payments, was pegged at 13.75%. While keeping this rate and maturity unchanged, ICICI now also proposes to offer an option whereby, a seven-year Regular Income Bond will provide an interest rate of 14% p.a. payable annually.

A new option of 18 years Money Multiplier Bonds would also be made available, for which the yield would be pegged at 14% p.a.

The interest rates on the various instruments to be offered would be as follows :

REGULAR INCOME BOND

Option I II III IV
Redemption Period 5 years 5 years 5 years 7 years
Interest Rate (%) p.a. 13.00 13.25 13.75 14.00
Frequency of interest payment Monthly Semi-Annual Annual Annual
Yield (%) p.a. 13.80 13.70 13.80 14.00

TAX SAVING BONDS

Option I II III
Tax Benefit Sec 88 Sec 88 Sec 54 EA
Redemption Period 3 years 3 years 3 months 3 years
Interest Rate (%) (payable annually) 12.50 Zero Coupon Bond (Yield 12.6) 12.50

ENCASH BOND

Year
1st
2nd
3rd
4th
5th
Applicable rate of interest for respective year (%) p.a.
11.00
12.00
14.00
15.50
18.00
Yield (%) p.a.#
11.00
11.50
12.20
12.90
13.70

# The yield to the investor if he opts for encashment at the -end of the Ist, 2nd, 3rd, 4th and 5th year

MONEY MULTIPLIER BOND (in the nature of Deep Discount Bond)

Option I II
Issue Price (Rs.) 4,000/- 4,700/-
Face Value (Rs.) 8,000/- 50,000/-
Redemption Period 5 yrs 4 months 18 years
Yield (%) p.a. 13.90 14.00

The next public offer of ICICI Safety Bonds is proposed to be open for subscription, from January 21, 1999 to February 9, 1999. Apart from the above four Bond products, ICICI would also offer a new Bond instrument, which is currently being finalized.