Indian banks unaffected of US sub-prime mortgage crisis

August 29, 2007: Reacting over the sub-prime mortgage crisis going on in the United States, the Reserve Bank of India (RBI) and National Housing Bank (NHB) have taken sufficient measures to protect Indian banking system of the same, said chairman of Housing Development Finance Corporation (HDFC) Deepak Parekh.

He pointed out that there are no chances of falling in lending rates at least in the next 6-months; however the RBI in its quarterly review of Annual Monetary Policy indicated that there won't be any further hikes in Cash Reserve Ratio (CRR). With this the industry experts signal that there won't be any turmoil in the home loan interest rates in the near term.

The Indian financial system is quite in control at this moment and the rate of inflation has come down to the levels of 4.05 per cent, he said adding that fall in inflation rate is a result of RBI's timely measures.

He assured that the Indian banking system bears no relation with the U.S. meltdown, which was consequent to the default loans being given to the parties with poor credit records.

The deputy managing director of ICICI Bank Chanda Kochhar corroborated that Indian banking system apart, the US crisis is unlikely to impact performance of Indian companies.