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India Inc dispels Dubai debt fears
Stock markets skidded today, commodity prices took a beating, Kerala panicked and even Bollywood worried as Dubai’s $60-billion debt woes sparked fears over corporate and bank exposure to the crisis. Indian companies and banks played down the impact, saying the exposure was not significant. - RBI to seek Dubai World exposure details from banks - Recovery still fragile: RBI - Remittances not likely to be hit: Chawla - RBI to ask banks about their exposure in Dubai World - "RBI studying Dubai World default impact" - DRDO lab, Navy to dev Kaveri marine engine The banking regulator and the government, too, also tried to calm sentiments stating that impact looked marginal. However, the Reserve Bank of India asked for data from banks on their exposure to Dubai World, the centre of the crisis. While RBI played down the issue, it emerged that Bank of Baroda (BoB) had an exposure of around $200 million (Rs 928 crore at today’s rates) to Dubai World. “The amount is due for repayment only after 2011. So, we have no immediate concern,” a senior bank executive said. State Bank of India officials said they had only $50 million exposure to Dubai World and there was no reason to worry over the “low” exposure. COOKIE CRUMBLES India-UAE (of which Dubai is 2nd biggest kingdom) non-oil bilateral trade at $29 bn (2007-08), up from $20 bn in 2006-07 & $12 bn in 2005-06 Bank of Baroda had exposure of $200 million (Rs 928 cr at current rates) to Dubai World. Amount due for repayment after 2011 $55 bn of deals announced between companies in India & UAE (many have not seen the light of the day) L&T’s total exposure in Dubai projects: Rs 100 crore (recovered 90% dues) Main items traded are gems & jewellery, textiles, spices, pharmaceuticals, silk, coffee, iron & steel Indians constitute 40% of Dubai’s population, forming 10-12% of India’s inward remittances. 31% of 5.3mn Indians in the gulf are in UAE DP World, part of Dubai World, runs 5 container terminals in India, accounting for 40% of India’s container traffic The Bombay Stock Exchange after opening at 16,718.80 slipped to a low of 16,210.44, down 645 points from the previous close. The panic seemed to subside after the opening of the European bourses, which led to the late recovery in the Indian markets. DLF, ICICI Bank clarified on exposure to Dubai. Some analysts played down the impact on the markets, saying the money involved was not as big as in some other cases in the past. However, valuations of some real estate initial public offerings set to hit the market may come under pressure. The importance of the Indian link to Dubai can be gauged from the fact that Indians constitute 40 per cent of its population, forming 10-12 per cent of India’s inward remittances. Thirty one per cent of 5.3 million Indians in the gulf region are in the UAE. The financial crisis in Dubai may not affect remittances sent by Indian expatriates in Gulf, policymakers and economists said, though Prime Minister’s Economic Advisory Council felt there could be a slow-down. “Remittances from expats did not suffer when the larger crisis was on. So whether this should have an impact in terms of employment, salaries and remittances is unlikely,” said finance secretary Ashok Chawla. Global commodities experienced steep fall today as investors and hedge funds across region unwound their long positions following the crisis. Most commodities were down 3-5 per cent as dollar strengthened.QuickQuid commented:
Dubai crisis can really affect India.I hope such exposure is really low leveled and there is no any harm to economy of India.
13.12.2011
12 month loan commented:
Debt is really a big problem and it is very important to rescue from the debt as soon as possible, otherwise you can not survive your life well with the bad debt.
15.12.2011
learn forex trading commented:
I agree with the economists that the financial crisis in Dubai may not affect remittances sent by Indian expatriates in Gulf.
15.12.2011
payday loan company commented:
It is no doubt that debt is a big problem fro anyone.So it becomes important to get rescued form debt as soon as possible.
16.03.2012