Risks to banking sector limited, manageable: RBI

The apex bank said that some banks, however, have an indirect exposure through their overseas branches and subsidiaries to the US sub-prime markets in the form of structured products.

These could be in the form of collateralised debt obligations and other investments, the apex bank said.

“However, such exposure is not very significant, and banks have made adequate provisions to meet mark-to-market losses on such investments,” the RBI said.

Besides, (Indian) banks also maintain a high-level of capital adequacy ratio, the RBI said, adding “thus, the risks in the banking sector appear limited and manageable.”