Indian firms, banks cautious as Sri Lanka battles financial crisis

India is Sri Lanka's third-largest export destination and it has invested heavily in the infrastructure and social sector projects in that country

Banks and companies in India are taking a cautious approach towards Sri Lanka, which, reeling from a financial crisis, has sought a $1-billion loan from the country to import essential commodities.

A senior State Bank of India (SBI) executive said the bank was committed (to Sri Lanka) for the long term. “As far as exposures (are concerned), the bank will be cautious on its dollar exposure to Sri Lankan entities till the situation improves,” he said.

SBI also transacts in the local currency —the Sri Lankan rupee — and that will continue because there is no risk there.

Among Indian