The Reserve Bank of India (RBI) is closely observing the events in the US after Lehman brothers Holding filed for Chapter 11 bankruptcy petition. The RBI is in constant contact with banks and other market participants to deal with the consequences of these events on the Indian markets in a systematic way.

Alpana Killawala, chief general manager, RBI in a statement said that in public interest and in the interest of financial stability, the RBI has directed Lehman Brothers Capital, a nonbanking financial company (NBFC) to take prior approval of the RBI before contracting any direct or indirect liability from any institution in India or outside India or making any foreign currency remittance.

The RBI has also directed Lehman Brothers Fixed Income Securities, a primary dealer not to announce any interim dividend or remit any amount to its holding company or any other group company without prior approval of the RBI. The RBI has also advised them against dealings in government securities as a primary dealer in the primary market.