Unlikely that Credit Suisse crisis will hurt India: Experts

Although Credit Suisse is more relevant to India’s financial system than Silicon Valley Bank (SVB), it has very limited operations, according to a report by Jefferies India.

India’s banking system is expected to remain unscathed from the troubles in Credit Suisse as it has a very small presence in the country, experts said. Although Credit Suisse is more relevant to India’s financial system than Silicon Valley Bank (SVB), it has very limited operations, according to a report by Jefferies India.

The Switzerland-based bank, the report said, “has less than Rs 20,000 crore in assets (12th among foreign banks), presence in the derivatives market and funded 60 per cent of assets from borrowings, of which 96 per cent are up to two months. Still, it’s small for the banking sector with 0.1 per cent share of assets.” “Given the relevance of Credit Suisse to India’s banking sector, we see softer adjustments in assessment of counter-party risks, especially in the derivative market,” it said.

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According to veteran banker Uday Kotak, who also managing director of Kotak Mahindra Bank, India’s macroeconomic factors are turning better and it can stand out in this global financial turmoil. Foreign banks have a relatively smaller presence in India with 6 per cent share in total assets, 4 per cent in loans and 5 per cent in deposits. They are more active in the derivative markets (forex and interest rates) where they have 50 per cent share.

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