India tops foreign bank borrowings in Asia

BIS data show nation borrowed $28 bn in fourth quarter of '07 .

Foreign banks have sharply increased their exposure to banks and financial companies in India by providing loans to the tune of $28 billion during the last quarter of 2007, according to the latest banking statistics of the Bank for International Settlements (BIS) last week.
"The rise in lending by banks in Europe and the United States to their counterparts in India reflects the degree of confidence in the Indian economy at a time when the global credit crisis had sharply deteriorated," banking analysts said.

"In Asia, India borrowed $28 billion, followed by China ($25 billion) and Korea ($17 billion)," said BIS, which is reckoned as the global watchdog for central banks the world over.

Worldwide consolidated foreign claims on India, which imply cross-border as well as local claims made on local residents by foreign offices of domestic banks, have gone up from $168,087 million to $195,939 million during the end of the third and fourth quarters of the last year.

"BIS figures suggest international banks do not harbour fears about the strength and resilience of Indian banks," said a Geneva-based banking analyst, arguing that "India is not facing the same travails as banks in the US and Europe, following the credit crunch, which cropped up because of the sub-prime mortgage meltdown."

A detailed break-up of the claims made by foreign banks on Indian banks and financial companies reveals that 16 countries have stepped up their exposure during the end of Q3 2007 and Q4 2007.