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Virendra Pandit

Bhavnagar (Gujarat), Sept. 19 The exposure of State Bank of India (SBI) to Lehman Brothers has been only to the extent of $5 million, 60-70 per cent of which is expected to be recovered, according to State Bank group Chairman, Mr O.P. Bhatt. When asked about the effects of such global financial meltdown on the Indian banking system, Mr Bhatt said the exposed amount was negligible compared with SBI’s global balance-sheet of $250 billion.

Mr Arun Ramanathan, Union Secretary for Financial Services, said that after the meltdown, the Government has made a preliminary assessment on global and Indian entities in terms of their balance-sheets. “The direct effect on us is negligible,” he said, adding that the Government is watching for any indirect impact.

“At a time when there is turmoil in the international banking system, we are happy that our policy of insulation has paid dividends. We should also learn lessons from this,” he added.

About the increased interest rates possibly triggering a hike in defaults, they said that there was little likelihood of any increase in NPAs. “In fact, our NPAs are declining,” Mr Bhatt said.

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