RBI to seek Dubai World exposure details from banks

The Reserve Bank of India (RBI) on Friday said it would ask banks to furnish details of their direct and indirect exposure to Dubai World, the beleaguered Dubai government-owned holding company which asked for more time to repay its debt.

While RBI played down the issue, it emerged that Bank of Baroda (BoB) had an exposure of around $200 million (Rs 928 crore at Friday's rates) to Dubai World, a senior bank executive said. "The amount is due for repayment only after 2011. It is paying interest and there are no overdues. So, we have absolutely no immediate concern," a senior bank executive said.

The bank's total exposure in the United Arab Emirates (UAE) was estimated at around Rs 10,000 crore, of which, the share of Dubai was around Rs 4,000 crore, the executive said.

Though the public sector player had an exposure of around Rs 600 crore to real estate companies in the UAE, the executive added that the lender was not exposed to Nakheel, Dubai World's real estate arm, which has borne the brunt of an almost 50 per cent drop in real estate prices.

Investors reacted negatively to news of BoB's exposure to Dubai World. The bank's scrip fell 4.64 per cent on the Bombay Stock Exchange (BSE) to close the day at Rs 521.40.

Axis Bank, ICICI Bank and Indian Overseas Bank (IOB), among others, have exposure to companies operating in Dubai and the UAE.

While IOB said its exposure was to the tune of $15-16 million (around Rs 70 crore), a senior executive at Axis Bank said the lender had an exposure of less than $10 million (around Rs 46 crore) to the Dubai arm of an Indian real estate developer, "but no significant exposure otherwise".

When contacted, a spokesperson for ICICI Bank said, "ICICI Bank has no material non-India linked exposure to Dubai companies."

A senior Bank of India executive said the public sector player neither had branches in West Asia, nor and any direct exposure to real estate companies in the region. It had two Indian clients with interests in real estate and construction in Dubai. The total exposure to these companies, whose names he refused to disclose, was pegged at $21 million (around Rs 100 crore). "These are performing assets and we do not expect much problem in repayments," he added.

"We will ask banks to furnish the details regarding their exposure in Dubai World," RBI Deputy Governor Shyamala Gopinath told reporters in Ahmedabad.

RBI Governor D Subbarao said, "We should not react instantly. We must first study the development and measure the strength of the problem," when asked about the impact of the developments in Dubai on India.