The Reserve Bank of India (RBI) has asked banks to furnish detailed information on their exposure to the Middle East, said bankers.
“The RBI has asked for a comprehensive breakdown of exposure, covering not just loans but also contingent liabilities such as guarantees and letters of credit,” said one banker, who confirmed the development on condition of anonymity.
Another senior state-run banker added, “We have been asked to provide details of the affected sector operating in the region. The exercise is aimed at mapping risks more closely.”
Mapping Granular Risk
According to them, the Central Bank has sought granular data on both direct and indirect loan exposure, including letters of credit, and other fund-based as well as non-fund-based facilities extended to corporates with operations in the Middle East.
While the regulator has not flagged any immediate concerns, the data collection exercise is expected to help it build a sharper picture of systemic exposure and prepare for potential stress scenarios.
According to report by State Bank of India research department on March 7, exposure of Indian banks to Qatar immediate country risk basis stood at $ 2.25 billion as of December 2025, while exposure to Oman and UAE stood at $800 million and $ 7 billion, respectively.
The report also pointed out that total GCC countries hold a share of 13.06 % in India’s export and 16.18% share in India’s total imports during Apr-Dec 25 period. Other West Asian countries holding a share of 2.03 % in export and 3.94 % share in Indias imports during the same period.
The move comes as the RBI intensifies its monitoring of overseas risks that could potentially spill over into the domestic financial system. Officials familiar with the matter said the regulator wants to assess the extent of vulnerability Indian banks may face if the situation in the Middle East escalates further, impacting trade flows, remittances and corporate operations.
The RBI also asked the data on exposures to sectors which are affected by the on-going crisis, bankers said. They stated that they are also watchful of their exposures and increased their due diligence.
Banks have played a significant role in financing trade and projects connected to the Middle East, given India’s deep economic ties with the region. With crude oil imports, remittances from Indian workers, and corporate linkages forming a large part of the bilateral relationship, the RBI’s stance is basically safeguarding financial stability.