Indian banks halt new GCC lending over worries of extended regional instability

The MENA-India corridor is tilting in one direction. Gulf sovereign capital is still flowingaggressively into Indian assets — Adia, Mubadala, and PIF are running the same playbook they had three months ago, and state-adjacent majors are holding the line. Emirates NBD, for example, is pushing ahead with its USD 3 bn acquisition of Indian lender RBL Bank.

But Indian bank capital coming the other way? Not so much. India’s largest state-owned bank just paused new Gulf lending.

“We have decided to take no new business in the GCC until we get some clarity on the situation,” State Bank of India (SBI) Chairman CS Setty told the Economic Times. Punjab National Bank has matched the move and pulled officials from Dubai back to India as part of business-continuity planning. SBI’s UAE and Bahrain books together account for 14% of its INR 7.42 tn overseas loan portfolio.