Under the umbrella prospectus approved by the Securities and Exchange Board of India, ICICI Bank [Get Quote] is set to launch the second public offering of its unsecured redeemable bonds in the nature of debentures aggregating Rs 400 crore (Rs 4 billion) with a right to retain oversubscription of up to Rs 400 crore.

The issue will open for subscription on February 28, 2005 and will close on March 9, 2005.

Two premier credit rating agencies have assigned AAA ratings for the bonds: 'LAAA' by ICRA and 'CARE AAA' by CARE. The ratings signify highest safety with regard to timely payment of principal and interest.

The Issue offers various options under three types of bonds: Tax Saving Bond, Regular Income Bond and Children Growth Bond.

Non-Resident Indians too can invest in these bonds on both repatriable and non-repatriable basis.

Tax Saving Bond

The investor may choose any of the following options in respect of the Tax Saving Bond:

* Subject to TDS as per the then prevailing tax laws
# Rounded off to the nearest multiple of 0.1
> The yield has been calculated assuming that a tax rebate of 15% is available to the eligible investors and that a surcharge of nil% and education cess of 2% of tax is payable in case of all the options.

Full and firm allotment is assured for all valid applications for the Tax Saving Bond.

Currently the maximum limit for taking benefit of the rebate under Section 88 of the Income Tax Act is fixed at Rs 100,000. Out of this, Rs 30,000 can be invested only in such eligible issue of capital, the proceeds of which are to be utilised in infrastructure projects.

Tax Saving Bonds offered by ICICI Bank is one such eligible investment for this purpose.

This means that out of the overall limit of Rs 100,000, Rs 30,000 can be invested only in such issues. Further to the Rs 30,000 one can also invest the balance Rs 70,000 in these bonds to avail the benefit under Section 88.

Thus it may be noted that the investors may invest the entire amount of Rs 1,00,000 in these bonds for taking benefit of rebate under section 88.

Regular Income Bond

* Subject to TDS as per the then prevailing tax laws
# Rounded off to the nearest multiple of 0.1

Under the Regular Income Bond, an investor can invest for 5 years or 7 years or 10 years and earn regular income on an annual basis.

Children Growth Bond

* Subject to TDS as per the then prevailing tax laws
# Rounded off to the nearest multiple of 0.1

All the bonds are available in Demat mode too.

For the investors who are investing for long term, holding the investment has been made more convenient as the same can now be held in dematerialised mode.

The investors have the option of availing the Electronic Clearing Facility for receiving their interest and redemption amount. This would obviate the need for issuing and handling paper instruments.

All the bonds will be listed on the Bombay Stock Exchange and the National Stock Exchange and are freely transferable before maturity.

The ICICI Bank Bonds-February 2005 issue provides the investors another opportunity to save at market interest rates and offers various redemption periods and options to choose from.

The investor can opt for regular income or deep discount bonds or invest in the Tax Saving Bond to help him plan his taxes as ICICI Bank Tax Saving Bonds offers an opportunity to save taxes.

This is the second offering of infrastructure bonds by ICICI Bank in the current fiscal to enable saving of taxes under Section 88.

ICICI Bank is the first bank to launch a public issue of bonds offering tax benefits under section 88 of the Income Tax Act.