Indian banks lent Rs 6,500cr
Mumbai, Nov 27: Amid the debt repayment crisis in Dubai, Indian banks on Friday said that they have an exposure of Rs 5,000-6,500 crore in the middle east city, but the bankers are not worried and said the development may not have major impact on their balance sheets.
Even as the RBI governor, Mr D. Subbarao, asked officials to make an assessment of fallout of the crisis triggered by $59 billion dollar on the middle east’s largest realty firm Dubai World for making necessary recommendations, banks including SBI and Bank of baroda said their accounts in the region are well maintained.
Bank of Baroda, the largest Indian lender in the United Arab Emirates, said it has an exposure of Rs 5,000 crore in Dubai.
The country’s largest lender State Bank of India has an exposure of around Rs 1,500 crore in United Arab Emirates, including Dubai.
“We have only a seven to eight per cent of our total loan-book in the entire Gulf region, which amounts to Rs 10,000-crore. These accounts are well maintained and is unlikely to cause any kind of impact on the balance-sheet,” the Bank of Baroda CMD, Mr M.D. Mallya, said.
Out of the total Gulf loan exposure, Dubai constitutes nearly half to the loan book which comes to less than Rs 5,000-crore, Mr Mallya said. An SBI official also said the bank’s loans to Dubai-based clients are on short-term basis and would be paid in three-six months time.
ICICI Bank also said it does not have any significant exposure to Dubai corporates. “ICICI Bank has no material, non-India linked exposure to Dubai corporates,” a spokesperson said.
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At last IBA has signed on agreement for 17.5% hike in wages of bank employees and also for second option of pension for those who were left earlier after struggle of bank employees for two years.. It is also reported that additional cost of pension arising due to wage revision over and above 10% of bank’s contribution will be borne by employees. This burden will be recovered form arrear payable to an employee. The burden said to come on the shoulder of Government or bank on account of pension will also be due to arrear payable to employees who have already retired. Here the question arises how the government will recover the share of burden from retired employees. As it was apprehended by many bankers , bank employees presently serving the bank has to sacrificed considerable portion of their arrear or wage for those who are said to be union leaders but retired from the bank long ago.
SBI group has protested the wage revision on the ground that they will get lesser amount of arrear because major portion of burden will go towards pension payment to retirees as also towards making provision for existing employees. It is important to point out that SBI employees are already privileged class of bankers because they are getting pension as third benefit whereas employees of other PSU banks will get no advantage if they choose to opt for pension because they have to share major portion of burden likely to occur in future on bank’s books
I think the wage agreement signed yesterday is apparently praiseworthy but it will cause more confusion and raise many eyebrows in coming days. Since it was settled after lapse of two years there is all round appreciation of the agreement and sign of relief is visible on the face of several employees. But compared to wage structure and pay revision accepted for central government employees, the wage structure of bankers is very poor and not enthusiastic. Voice of protest and line of litigation in courts may bring about hurdle before release of arrears.
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