'Exposure of banks to Lehman Brothers US$ 336 mn'
The government said that banks have exposure of US$ 336 million in US-based investment bank Lehman Brothers, which has filed for bankruptcy.india Updated: Oct 20, 2008 18:36 IST
The government on Monday said banks have exposure of US$ 336 million in US-based investment bank Lehman Brothers, which has filed for bankruptcy.
The banks' exposure to Lehman Brothers is US$ 336 million (Rs 1,580 crore) as on September 30, Finance Minister P Chidambaram told Lok Sabha in a written reply.
The exposure mainly consisted of investments in floating rate notes, nastro balances, bank guarantees, forex exposures, etc, he said.
The banks have made aggregate provision of US$ 47.3 million (about Rs 220 crore) on these exposures, he added.
The above figure has been arrived after RBI's assessment in the light of recent developments relating to failure of some large financial institutions in the USA and Europe representing investment banking, insurance and commercial banking segment, he said.
On the sub-prime, finance minister said it has been observed that none of the Indian banks and foreign banks (operations in India) had any direct exposure to sub-prime mortgage market in the USA and other markets and no direct impact could be seen.
However, a few banks had mark-to-market losses in their overseas operations, he said, adding some of the Indian banks with overseas operations though not having any direct exposure to the US sub-prime markets, invested in certain Collateralized Debt Obligation which had a few underlying entities having sub-prime exposure.
Chidambaram said the overseas exposure of 12 Indian banks having overseas operation towards credit derivatives comprised mainly Credit Default Swaps, Collateralized Debt Obligation and Credit Linked Notes.
First Published: Oct 20, 2008 18:27 IST