p class=”source”a HREF=”http://www.nytimes.com/2008/12/20/business/20nocera.html?pagewanted=all”www.nytimes.com/a/p
p class=”summary”MUMBAI, INDIA, December 22, 2008: So far, India’≥ banking and real estate market remains steady and secure amidst the economic turmoil affecting many other countries. “ân India, we never had anything close to the subprime loan,”†said Chandra Kochhar, the chief financial officer of India’≥ largest private bank, Icici. “Åll lending to individuals is based on their income. That is a big difference between your banking system and ours.”†She continued: “ândian banks are not levered like American banks. Capital ratios are 12 and 13 percent, instead of 7 or 8 percent. All those exotic structures like C.D.O. and securitizations are a very tiny part of our banking system. So a lot of the temptations didn’¥ exist.”¢r /br /Yet two years ago, the Indian real estate market —†commercial and residential alike —†was every bit as frothy as the American market. So why did the Indian banks stay on the sidelines and avoid most of the pain that has been suffered by the big American banks?br /br /Part of the reason is cultural. Indians are simply not as comfortable with credit as Americans. “Å lot of Indians, when you push them, will say that if you spend more than you earn you will get in trouble,”†an Indian consultant told me. “Åmericans spent more than they earned.”†Mr. Parekh said, “ìavings are important. Joint families exist. When one son moves out, the family helps them. So you don’¥ borrow so much from the bank.”†/phr /

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