The recent announcement by Dubai World, a government-owned conglomerate, regarding its current financial situation has not directly affected India, says Consul-General of India in Dubai Venu Rajamony.
“This decision is not going to lead any sudden job losses of Indians or an exodus back to India,” he said. In a statement, Mr. Rajamony added there was “no cause for any kind of panic.”
Dubai World is seeking a six-month delay on payments due to its creditors on around $59 billion in debt.
Mr. Rajamony said officials at the Dubai Port World have given reassurances that there will be no disruptions in their projects in India. There will also be no reduction in their commitments or investments in India.
According to its website, Dubai Port World operates five container terminals in India, while two others — one at Vallarpadam in Kerala and Kulpi in West Bengal — are under development.
The Consul-General said Dubai and the United Arab Emirates was “fully capable of handling the short term crisis faced by Dubai World.”
“The leadership of the country is in charge of the matter and the outstanding amount is well within the capacity of the country as a whole to repay,” he said.
The statement added that the announcement by Dubai World indicates the desire of the government to take charge of the situation and intervene in order to address the problem.
Expressing confidence in the Emirate, Mr. Rajamony said Dubai continues to retain its position as India’s key partner in the region. He pointed out that because of its world-class infrastructure and advantageous geographic location, Dubai will remain a convenient commercial hub for India.
In a related development, the Central bank of the UAE announced that it fully backed UAE banks and branches of foreign banks operating in the country.
According to official news agency WAM, the Central bank has issued a notice to the UAE banks and branches of foreign banks operating in the UAE, that it was making available to them a special, additional liquidity facility linked to their current accounts at the Central bank.
The statement said from the consolidated balance-sheet of the banks, interbank deposits of the UAE Banking System constitute 10.3 per cent of the liabilities side, with foreign interbank deposits constituting 5 per cent only.
