"We usually fix the interest rates just before the issue and we take into account the rates being offered by other institutions such as Unit Trust of India (UTI), Housing Development Finance Corporation," a senior official of ICICI said.

In fact, in its last tranche of bonds issued in May this year, it had already decreased the interest rates on its bonds offering 12.75 per cent on a five year regular bond against the 13.75 per cent it had offered in its previous issue in March, 1999.

While officially ICICI was reluctant to commit itself, the indications are that its next edition (scheduled for July according to the trend) under the safety bond series will see lower interest rates - probably in the region of 11 per cent, sources said.This year UTI also reduced the rate on its monthly income plan to 10.75 per cent from the 12 per cent offered in earlier issues.

The last time the financial institution (FI) had reduced the tenure of many of its instruments from five years to three years, while the rates on these were reduced by 25 to 50 basis points.

In another major change in its strategy, ICICI will also be cutting down its loan exposure to manufacturing projects further this year. Last fiscal, loans to manufacturing projects accounted for only 25 per cent of its disbursals compared to 66 per cent in the previous year. "We have taken a conscious decision to make financial commitments only to those projects which are financially sound and has a relatively low gestation period, official sources said.

With the low demand for foreign currency loans among corporates this year, ICICI might well not access loans abroad during the year, officials said. In this connection it may be recalled that another FI, Industrial Development Bank ofIndia, had a large portion of unutilised portion of foreign currency denominated loans as much of the corporate sector was content with rupee finances.

In line with the FI's strategy to intensify its retail services, it will be opening "safety centres" , said the official, adding 70 such centres would be opened this year to cater to those who have invested in its safety bonds.