Banks told to disclose their exposure

Gopinath was here to deliver a talk at IIM Ahmedabad where the premier business school’s famous annual event Confluence began  on Friday.

“We will ask the banks to furnish the details regarding their exposure in Dubai World,” she said, adding, “Presently, I also don’t have much information on the issue because the situation is still unfolding.”

On measures the apex bank is contemplating, she said, “we first need to understand the extent of the exposure of our banks. Once we have the details, we can comment.”

The announcement in the Gulf country has triggered a shock wave in the stock market across the globe.

Dubai has borrowed US$80 billion during the four-year construction boom to transform its economy into a regional tourism and financial hub, but the government’s plan to delay debt repayment sent markets across the world into a tizzy on fears of fresh financial trouble.

Meanwhile, Reserve Bank of India Governor D Subbarao said the RBI is examining the impact of the Dubai government’s decision to suspend debt payments by Dubai World, which led global stock markets to tumble amid fears of widespread default.
Governor Subbarao said he has asked his officials to study the impact and “if necessary make recommendations.”

“We shouldn’t react to instant news like this. One lesson that we learnt from the (global financial) crisis is that we must study the developments and measure the extent of the problem and hence study the impact on India,” said Subbarao, who attended an interactive session with the students of Indian School of Business here.
Meanwhile, N Chandrasekharan, CEO and MD, Tata Consultancy Services, said it did not have much exposure to Dubai markets and so impact if any is negligible.