India 'will not succumb to global turmoil'

Mumbai: Indian financial institutions will not succumb to global turmoil and the country is on track to grow about 8 per cent a year, India's Finance Minister said on Thursday.

"All our financial institutions are on sound foundation," Finance Minister P. Chidambaram told reporters in New Delhi.

The nation's insurance and banking regulators have, he said, "assured me that there is no reason for apprehension". Troubled US insurance giant American International Group Inc, which the US Federal Reserve propped up Wed-nesday with an $85 billion emergency loan, has two insurance joint ventures in India, both with the Tata Group.

Chidambaram said both ventures will remain solvent.

"We have received a full report from the Tata-AIG management. The solvency margins are adequate. The Tatas who own 74 percent of the equity have assured us that all payment obligations will be met," he said.

"AIG is not a failed financial institution," he added.

Chidambaram said the government would take steps to provide additional liquidity, if needed, and that the central bank is working to ensure orderly movement of the exchange rate.