Even after getting a package of $ 54 billion, RBI’s keen eye on Credit Suisse, why?

After the continuous fall in the shares of Credit Suisse, there were also reports of its drowning. After which the Swiss Central Bank put an end to all the news by announcing a package of $54 billion.

RBI Eye on Credit Suisse: The Reserve Bank of India is reportedly closely monitoring all developments related to Credit Suisse Bank. Despite this, Credit Suisse has received a bailout package from the Swiss Central Bank. According to people familiar with the matter, the bank’s exposure to India is very low. In such a situation, it is impossible to have any kind of effect. Credit Suisse has a limited presence in India, with only one branch and a 1.5 percent stake among foreign banks in the country. Its share in banking assets is just 0.1 per cent.

Local banks downgraded

Despite this limited presence, domestic banks and currency market traders have adopted a cautious approach and are avoiding any fresh counterparty risk exposure against lenders. Reportedly, Credit Suisse’s short term G-Secs in India account for nearly 70 per cent of its total assets. Banks in the country have downgraded Credit Suisse’s internal rating, making it difficult for them to forge new business relationships with the lender. Now Credit Suisse will have to wait and see how long the Indian banking sector remains wary of lender’s risk.

Read also: Can Credit Suisse Crisis increase India’s concern? Why did this question arise

The world’s first such bank

Credit Suisse, Switzerland’s second largest bank, has become the first major global bank to receive an emergency credit line since the 2008 financial crisis. After the continuous decline in the shares of Credit Suisse, news of its sinking also started coming. After which the Swiss Central Bank put an end to all the news by announcing a package of $54 billion.

Read also: Credit Suisse shares jump 40% after central bank funding

There are assets worth only 20 thousand crores in the country.

Credit Suisse, with 60 per cent of debt-funded assets in India, holds just 0.1 per cent of the total assets of the Indian banking sector, estimated at around Rs 20,000 crore, according to data from US-based brokerage Jefferies. . According to the brokerage, due to the importance of Credit Suisse to India’s banking industry, counterparty risk is only in the derivatives market. According to the US brokerage firm, the Reserve Bank of India will closely monitor the liquidity problems and intervene if necessary.