Impact of US Subprime Crisis on Indian Economy

ABSTRACT The word ‘subprime ’ in relation to mortgages in the USA generally refers to those mortgages targeted at bor-rowers with impaired or low credit ratings and low income level who may find it difficult to obtain finance through traditional sources, such as, prime mortgages. Subprime borrowers have the highest perceived default risk, as compared with Prime borrowers. The current paper tries to discuss the emergence of US subprime crisis in United States of America which later affects the entire world. The turmoil in Global market was not in short duration of time. This paper also focuses on the Stages of Subprime crisis and the main causes of the same. In the later part of the paper negative effects of subprime crisis on Indian economy is explained and at last the paper also put in plain words some of the constructive steps taken by RBI and SEBI to minimize the Subprime effect on Indian Banking sector and Indian Capital Market respectively