The banking community reckons the country?s banking and financial system will bounce back to normal soon. Like many others from the commercial fraternity, they reckon that there would only be short-term impact on the markets and even the currency.
?There might be some negative impact on the money markets in the short term, following the terror attack in Mumbai. Markets may be bearish since the future settlements are getting postponed. Bond markets may remain where they are, rupee may weaken,? said NS Venkatesh, managing director, IDBI Gilts.
Condemning the killer attacks in India?s financial capital, HDFC chairman Deepak Parekh said, ?Blasts are bad for investor confidence.? And, ICICI Bank CEO and managing director K V Kamath said the attacks ?clearly show that our institutions could be vulnerable whether institutions of commerce like hotels or any institutions doing any sort of business.?
?Everyone needs to be on high alert at this point of time,? he said. However, while the city has a track record of bouncing back, ?this is new type of attack and I am sure the city has to adjust to this attack,? Kamath told agencies.
?Growth and investments continue to remain strong since the fundamentals of the economy are vibrant. Indian corporates will rise, its just a matter of time. Such events won?t impact the economy in the long term. However, in the short run, we may witness some weakening of the Indian currency,? said an official with a public sector bank.
TS Narayanasami, CMD, Bank of India & chairman, Indian Banks? Association reckoned that the impact will be a short term impact as India was being watched all over the world, and there could be an increase in the risk perception. He also said there could be some impact on the FII inflows to some extent in the short-term as the foreign investors may lose their confidence for the time being. ?Tourism industry may also be affected a little bit initially which may impact on our foreign exchange reserves too. But, let me add here that it is not going to be long lived as our country was resilient enough to absorb such shocks? Narayanasami asserted.
MD Mallya, CMD, Bank of Baroda would rather look at the brighter side, ?The Indian scenario looks gloomy for now, but India will bounce back. There should not be a significant impact on the growth and investment in the country. FIIs may be subdued for a while. However, things should get back to normal as early as possible.?