Singapore keeping wary eye on Indian banks

Concerned about their weakening asset quality.

The Monetary Authority of Singapore (MAS), the banking sector regulator, is reported to be looking more closely into the local operations of some Indian banks to assess the credit quality of loans made from the branches to Indian companies. Singapore is the second-largest source of foreign investment flows into India.

S S Mundra, chairman and managing director of state-run Bank of Baroda, told Reuters there is an enhanced degree of oversight by MAS on Indian Banks in the recent days.

Sources said MAS is keeping closer tabs on the (non-performing asset levels and looking at the quality of assets financed. Other bankers said MAS in some cases has suggested that banks re-classify some loans as NPAs.