The collapse of Lehman Brothers, a major Wall Street investment bank, sent shockwaves through financial markets as global liquidity dried up and investor confidence reached an all-time low. Banks with exposure to complex financial instruments in high-debt environments were considered particularly vulnerable. ICICI Bank — India’s largest private-sector bank with maximum international exposure among Indian banks — was hit by rumours about its exposure to Lehman assets. Solvency fears drove its depositors to withdraw large sums of money and the bank’s stock value started to erode. ICICI’s management responded to the crisis by initiating an intense public relations effort: the bank released information on its exposure and supported its position through media appearances of its top executives and statements issued by rating agencies, regulators, and the government of India. The bank emphasized the strength of its balance sheet, the limited exposure to risky assets, adequate provisioning, and a healthy cash reserve ratio. It alleged malaise and rumour-mongering by market intermediaries as the reason behind the crisis and denied any threats to its solvency. The public relations effort had barely concluded when another episode of stock collapse and customer withdrawal started. The case gives students an opportunity to evaluate crisis communication efforts in the age of new media and its link with business reputation. The student, in the role of a PR consultant, must decide why the efforts failed. What else could have been done to restore trust?

The collapse of Lehman Brothers, a major Wall Street investment bank, sent shockwaves through financial markets as global liquidity dried up and investor confidence reached an all-time low. Banks with exposure to complex financial instruments in high-debt environments were considered particularly vulnerable. ICICI Bank - India's largest private-sector bank with maximum international exposure among Indian banks - was hit by rumours about its exposure to Lehman assets. Solvency fears drove its depositors to withdraw large sums of money and the bank's stock value started to erode. ICICI's management responded to the crisis by initiating an intense public relations effort: the bank released information on its exposure and supported its position through media appearances of its top executives and statements issued by rating agencies, regulators, and the government of India. The bank emphasized the strength of its balance sheet, the limited exposure to risky assets, adequate provisioning, and a healthy cash reserve ratio. It alleged malaise and rumour-mongering by market intermediaries as the reason behind the crisis and denied any threats to its solvency. The public relations effort had barely concluded when another episode of stock collapse and customer withdrawal started. The case gives students an opportunity to evaluate crisis communication efforts in the age of new media and its link with business reputation. The student, in the role of a PR consultant, must decide why the efforts failed. What else could have been done to restore trust?