New Delhi, Sep 18 (UNI) Finance Minister P Chidambaram today said Indian Public Sector Banks have virtually no exposure to the debt of Lehman Brothers, which filed for bankruptcy in the United States this week, adding that there was no case for alarm.
''Let me assure everyone there is no cause for any alarm that any Indian bank is exposed or vulnerable like a couple of banks that have failed in the United States,'' Mr Chidambaram told reporters after a briefing on decisions taken by the Cabinet Committee on Economic Affairs (CCEA) here.
''Our banks have strong balance sheet and are well regulated,'' he said.
He said the Tatas, majority stakeholders in Tata-AIG joint venture, have assured the government that they would meet all the obligations to their policy holders.
Mr Chidambaram said more steps would be taken to provide liquidity to tide over credit tightening in the aftermath of fresh global financial market turmoil.
''All our financial institutions are on sound foundation,'' Mr Chidambaram said.
''The nation's insurance and banking regulators have assured me that there is no reason for apprehension,'' he said.
Troubled US insurance giant American International Group (AIG) Inc, which the US Federal Reserve propped up Wednesday with an 85 billion dollar emergency loan, has two insurance joint ventures in India, both with the Tata Group.
Mr Chidambaram said both ventures will remain solvent.
The US financial crisis consumed the US' fourth largest investment Bank. The Finance Minister was giving his first reaction to the collapse of Lehman Brothers and bail out of insurer AIG by the US Fed.
The Finance Minister said the government would continue to pursue reforms to retain near eight per cent economic growth momentum.
Mr Chidambaram said as far as PSU banks were concerned they did not have any undue exposure and whatever exposure they have are in accordance with RBI's guidelines. Although ICICI Bank had some exposure, it has made disclosures for the same.
''I still maintain my view that growth in 2008-09 will be close to eight per cent,'' Mr Chidambaram said adding that he saw no reasons to halt financial reforms.
''As long as regulation remains a step ahead of innovation, there is no reason to fear that financial sector reforms will cause us difficulties or problems,'' he said.
UNI GS SR GC1949