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Indian Banks Halt Gulf Exposure Amid Crisis
11 May
Summary
- Indian banks paused new business in Gulf countries.
- Existing relationships are under careful monitoring.
- SBI and PNB are among banks taking a cautious approach.
Indian banks have suspended new financial exposures in Gulf countries as a precautionary measure amid the protracted Iran crisis. The focus has shifted to diligently monitoring existing relationships to avert any balance-sheet distress.
State Bank of India chairman CS Setty stated that while the bank's business and asset quality remain unaffected thus far, a decision has been made to halt new business in GCC nations until greater clarity emerges. Existing operations are being managed, with no current impact observed, though prolonged conflict could affect domestic economic indicators.
Other public sector banks, despite limited foreign operations, are also exhibiting caution towards the GCC. Punjab National Bank CEO Ashok Chandra confirmed the bank's stance on refraining from new exposure in the region. Even banks without direct operations in West Asia, such as Indian Overseas Bank, are closely observing developments and focusing on maintaining the health of their current portfolios abroad.
