Why recession didn't affected India's banking sector...

Hi anurag, we Indians tend to be conservative. We are great ones in ensuring we have a home and adequate bank balance before we start going out on any vacation or buying any costly items. There are many people in west, who borrow for vacations, and then pay for them. Hardly any Indian would do that! So it is basically difference in the way Indians manage their monies. Aversion towards debts is just another part of Indian attitude. An Indian would think ten times whether or not the debt is truly manageable before venturing into it. Moreover, the banks are much too cautious. They lend only when a defined criteria is met. This means not many can get home loans. Wars are expensive, first it was Afghanistan, and then followed by Iraq. It would take its toll. Lastly the securitization in the US. Following the great depression, American government came up with a new method to ensure that the system remains filled with liquidity. So when anybody takes a home loan, the bank sells the loan to investors. Effectively, bank only earns commission in between, without using its own funds. Such investors are happy to receive returns higher than what they get on government securities. Such mortgage investors and mortgage investments led to the present debacle. But - honestly - the concept is not bad at all. It is the way it was implemented.

The most important thing people forget to mention here is .... Our rupee currency is not convertible to "CAPITAL ACCOUNT" ...we can import/export with our Rupee currency and convert it to other country's currency but We cant convert it to CAPITAL ACCOUNT our currency cant be traded freely in International Monetary Market.... This is the reason why our Economy and banking sector were safe from global recession...

Hi Anurag, I'm not really sure why India was not affected. I'm in the U.S. and I didn't know the recession was even over with. It sure still feels like it is going on and getting worse and worse.