{"id":89511,"date":"2026-05-11T00:00:00","date_gmt":"2026-05-11T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/mena-india\/?p=89511"},"modified":"2026-05-11T11:38:05","modified_gmt":"2026-05-11T11:38:05","slug":"sbi-pauses-new-gulf-lending-as-iran-crisis-drags-on","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/mena-india\/2026\/05\/11\/sbi-pauses-new-gulf-lending-as-iran-crisis-drags-on\/","title":{"rendered":"SBI pauses new Gulf lending as Iran crisis drags on,"},"content":{"rendered":"

<\/strong>India\u2019s<\/strong> largest state-owned bank has paused new Gulf lending as the <\/strong>Iran <\/strong>crisis plays out <\/strong>\u2014 a sharper turn than the broader \u201cIndian banks are cautious\u201d framing in the Economic Times<\/a> today and a signal for the MENA-India banking corridor. State Bank of India (SBI) Chairman CS Setty said the lender will take no new GCC business \u201cuntil we get some clarity on the situation,\u201d while continuing to run its existing book. Punjab National Bank (PNB) is doing the same.<\/p>\n

Why does it matter? The corridor is tilting. <\/strong>Gulf sovereign capital is still flowing aggressively into Indian assets<\/a>, with the UAE\u2019s Abu Dhabi Investment Authority and Mubadala Investment and Saudi Arabia\u2019s Public Investment Fund continuing to anchor the region's global investment strategy. Indian bank capital going the other way is not. The Iran crisis is widening that asymmetry \u2014 Gulf-to-India remains a green light, while India-to-Gulf is now at risk.<\/p>\n

How exposed is SBI? <\/strong>Its overseas loan book is INR 7.42 tn \u2014 about 15% of its INR 49.32 tn asset base. The UAE and Bahrain together account for 14% of overseas loans, well behind the US (26%) and the UK (18%). Not enough to break the bank if the conflict drags on \u2014 but enough to be worth protecting.<\/p>\n

PNB is in the same posture and has moved officials from Dubai back to India as part of business-continuity planning. <\/strong>The lender runs its Gulf book through the Dubai International Finance Center and handles international business from its Gift City branch in Gujarat. Indian Overseas Bank, which has no Middle East operations, says it's not directly affected but is seeing some overseas business slowdown.<\/p>\n

The macro question is the more interesting one. <\/strong>SBI Research's own numbers (pdf)<\/a> say every USD 10 \/ bbl increase in crude widens India\u2019s current account deficit by 30-35 bps, lifts inflation by 35-40 bps, and cuts GDP growth by 20-25 bps. That\u2019s the channel that matters \u2014 not the direct loan-book hit. India\u2019s domestic economy is still doing the heavy lifting, with real GDP growth projected at around 7.2% in 4Q FY 2026 and 7.5% for the full year, before moderating to 6.6% in FY 2027 as geopolitical risk feeds through.<\/p>\n

What's next: <\/strong>Setty flagged that a conflict could last five to six months and would start weighing on domestic macro conditions. SBI has not flagged any immediate asset-quality impact on its existing Gulf book.<\/p>\n

(** Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.) <\/p>\n","protected":false},"excerpt":{"rendered":"

SBI has paused new GCC business until there is more clarity on the conflict, while PNB is also avoiding fresh exposure in the region<\/p>\n","protected":false},"author":1,"featured_media":89512,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2495],"tags":[2494,2402,2479,2659],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-89511","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-banking","tag-enterpriseam-india","tag-finance","tag-india-gcc-corridor","wpautop","entry"],"acf":{"mongo_id":"9c4abd8d-01f8-4a0e-b447-80a6b69c7567","order":"4","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2026\/5\/548.jpg","photo_position":"above","homepage_title":"","full_issue_title":"SBI 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