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RBI deputy governor plays down impact of crisis-hit Dubai World on Indian banks
A senior official of the Reserve Bank of India (RBI) has said that the exposure of Indian banks to crisis-hit Dubai World is in the range of $275-300 million and it will not have any material impact on the sector's performance this year, reports PTI.
"About four or five Indian banks are owed a combined $275-300 million. The RBI is fully aware of the exposure and we do not think it will have any huge impact on any bank in particular," RBI Deputy Governor K C Chakrabarty told media persons on Monday.
Commenting on the impact of the global crisis on the UAE and Dubai, Mr Chakrabarty said the Gulf country's government and the Central Bank have taken effective measures and there is no reason to panic.
On granting licences to foreign banks to open branches in India, Mr Chakrabarty said it will be decided on a reciprocal basis.
A number of UAE-based banks have shown interest to start operations in India and large lenders like the State Bank of India are also keen to set up branches in the Gulf country.
Speaking at a meet organised by the Emirates Bankers Forum at the Dubai International Financial Centre, Mr Chakrabarty said India was less impacted by the global financial crisis because of its conservative monetary and fiscal policies.
"We are not claiming that we had any special formula. It is a combination of prudent monetary and fiscal policies and to a great extent, good luck that helped India withstand the crisis," he said.