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US crisis not cause of concern: FM

P Chidambaram said that there is no cause of concern for public sector banks as they have no exposure in US-based financial institutions, which are in deep credit crisis.

business Updated: Sep 18, 2008 14:03 IST

Finance Minister P Chidambaram on Thursday said that there is no cause of concern for public sector banks as they have no exposure in US-based financial institutions, which are in deep credit crisis.

"Our banking institutions are insulated from the US crisis. PSU banks have virtually no exposure while ICICI Bank has some," he said while talking to media in New Delhi.

Chidambaram was replying to queries on the fallout of global financial crisis precipitated by the collapse of Lehman Brothers and buyout of Merrill Lynch by the Bank of America.

The Finance Minister further said that there would be some credit tightening, but the Reserve Bank of India (RBI) is seized of the problem.

On the fate of Tata insurance venture with the American Insurance Group, which has been taken over by the US government, Chidambaram said the Tatas have assured insurance regulator IRDA that all Tata-AIG payment obligations will be met.

Country's largest private sector lender ICICI Bank has reported an exposure of Rs 375 crore in the senior bonds of Lehman Brothers Inc.

ICICI Bank has said its London subsidiary has 57 million euro (about Rs 375 crore) exposure in Lehman Brothers which has filed for bankruptcy protection.