Finance Minister Pranab Mukherjee today said that if the Eurozone crisis stretches on, it could have an adverse impact on capital flows and pose a major concern for the country in the medium-term.
"If the crisis in Greece turns into a larger European sovereign debt crisis and possible fragmentation of the European region, there are chances of adverse capital flows," Mukherjee said, adding that such a scenario would be a major concern for India in the medium-term.
He was speaking at the annual general meeting of the Indian Banks Association (IBA) held here today.
India has, however, taken several steps to restrict the adverse impact on markets arising out of volatility caused by the European debt crisis, the Minister had said earlier in the day.
On the other hand, there would be no significant external shock to India if the crisis is successfully contained and the European recovery resumes, he said.
The Finance Minister also expressed his appreciation for the robust Indian banking sector, which had stayed immune to the crisis despite deregulation and global turmoil.
