New Delhi: Indian banks aren’t vulnerable to the global credit crisis that’s led to the collapse of two US investment banks, finance minister P. Chidambaram told reporters in New Delhi on Thursday.

On guard: The RBI building in New Delhi.?After Monday’s global crisis, the central bank has taken steps to ease funds availability in India. Ramesh Pathania / Mint

Indian lenders are well regulated and there’s no cause for any alarm, Chidambaram said.

The Reserve Bank of India took steps to increase funds available to banks earlier this week as there may be some impact on credit because of the global squeeze, the minister said.

India will take more steps to make credit available if needed, Chidambaram said.

The US Federal Reserve, the European Central Bank and the Bank of Japan on Thursday joined with their counterparts around the world to pump dollars into the financial system on concern more banks will follow Lehman Brothers Holdings Inc. into bankruptcy.

American International Group Inc. (AIG), which had to be rescued by the US government this week, hasn’t disrupted operations at its units in India, Chidambaram said. The company’s two ventures with the Tata group have assured India’s insurance regulator they have enough funds to meet obligations, he added.

State Bank of India, the nation’s largest, closed 2.14% up on the Bombay Stock Exchange (BSE), rebounding from a 6.9% decline earlier in the day.

The lender led a revival in BSE’s 14-company Bankex Index, which had shed 6.2% this week through Wednesday as the global financial crisis deepened following Lehman’s bankruptcy petition.

ICICI Bank Ltd, the country’s second largest, gained 2.78%. The stock had dropped 14% this week, through Wednesday, after the bank said it may have to setaside an additional $28 million (Rs131 crore) to cover losses on investments in Lehman securities in the UK.

The bank, which had an exposure to foreign markets equal to about 4% of its total balance sheet, on Thursday, said it had the capability to handle market movements.

ICICI Bank can still post healthy profits and maintain healthy capital adequacy, joint managing director Chanda Kochhar said on news channel NDTV Profit. “The size of the exposure is very, very small related to the size of our balance sheet," she said, adding there were no medium or long-term worries about solvency. She said the bank’s overseas units had exposure to foreign markets and its Indian operations were insulated.

Brokerage Edelweiss Capital Ltd said it expected ICICI to post about $200 million in losses on bonds, including debt issued by Lehman.

Amid the upheaval on Wall Street, governors and officials of twenty central banks will meet in Thailand this weekend for a regular meeting. “The meeting will go ahead but we are not sure who will be attending. We will know tomorrow (Friday)," a Bank of Thailand official said.

The South-east Asia, New Zealand and Australia (Seanza) governors’ symposium from 19 September in Bangkok was scheduled before the turmoil in the US banking system triggered panic selling on world stock markets.

The group includes the central banks of Japan, China, Australia, India and several South Asian and South-East Asian countries.

Bank of Japan deputy governor Kiyohiko Nishimura, who will attend the Bangkok meeting, said on Thursday that tensions in global financial markets had increased but he did not expect the turmoil to seriously affect Japan’s financial system.

“Even considering the effect of the failure of major (US) investment banks, I don’t expect it to seriously affect the stability of Japan’s overall financial system," Nishimura said in Tokyo.

M.C. Govardhana Rangan of Bloomberg, and Reuters contributed to this story.