No Dubai worries for Indian banks

Indian banks said their loan book exposure to the debt crisis in Dubai is negligible.
State Bank of India, the country’s largest lender, said in all its business exposure to the emirate is at Rs 1,500 crore or 0.3% of its total loan book.

Rival ICICI Bank said it has no material, non-India linked exposure to Dubai corporates.
“We have only 7-8% of our total loan-book in the entire Gulf region, which amounts to Rs 5,000 crore. These accounts are well maintained and are unlikely to cause any impact on the balance sheet,” Bank of Baroda’s chairman and managing director M D Mallya told PTI.

Leading private sector lenders, Axis Bank and Kotak, also said their exposure to the Gulf region was minimal. International banks, however, have some exposure to businesses in Dubai.

Standard Chartered is said to have some material exposure to the emirate, but analysts said its capital position is so robust, it is unlikely to face a serious hit. JP Morgan analysts Kian Abouhossein, Sunil Garg and others in a note on Friday, alluded to the size of the outstanding compared with global loan syndication. “Only RBS, Deutsche Bank and Credit Suisse have some modicum of exposure,” they said.

Meanwhile, the Reserve Bank of India has decided to make an assessment of the impact of Dubai’s debt issue before reacting to it. Speaking to reporters in Hyderabad, the governor of Reserve Bank of India D Subbarao on Friday said, “We should not react to instant news like this. One lesson of the crisis is that we must study the developments, and I think we must measure the extent of the problem there and how it impacts India.”

(With agency inputs)