RBI to Study Impact of Dubai Crisis

Submitted by Poonam Das on Sun, 11/29/2009 - 14:27

Dubai World WorriesThe Reserve Bank of India has started the process to study the impact of Dubai World crisis on Indian economy, asking lenders to give details of their exposure to Dubai World.

Speaking to reports in Hyderabad, RBI Governor Duvvuri Subbarao, added, "I have requested our officers to study this. If necessary, we will certainly communicate in the public what the implications might be."

A senior Indian government official said that Indian banks have a small exposure in Dubai World, a conglomerate spanning real estate, ports and leisure. Thus, the Dubai World's debt problems would have meager impact on Indian banking sector.

RBI Deputy Governor Shyamala Gopinath added that the impact would be clear after getting information from banks regarding their exposure. She articulated, "Since we do have some capital account regulations, the possibility of banks in India having lent to this entity would be much lower than other countries."

Meanwhile, top Indian lenders including the State Bank of India and ICICI Bank have made it clear that they have very small exposure in Dubai World. Bank of Baroda Chairman M.D. Mallya also said that there is no cause of worry as its exposure in Dubai entities accounts just 5%-6% of the bank's total loan book.


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