An effective settlements system has helped Indian stock markets face the challenges posed by the global financial meltdown, the Sebi chairman said on Wednesday.

"We have had a challenge when the index came down heavily. Our stock exchanges have proved equal to the challenge and settlements were on schedule," Securities and Exchange Board of India chairman C B Bhave said at the Simergence 2009 seminar in Mumbai on Wednesday.

"There have been instances around the world where countries had had to close down their stock markets (due to problems in their financial system) or suspend trading for a week or more. In India, we did not have to do any of those things," Bhave said.

Indian stock markets crumbled and mutual funds faced redemption pressures with the onset of the crisis in global markets, which originated in the US due to the sub-prime turmoil, and later the collapse of Lehman Brothers.

"With the collapse of Lehman Brothers, trust failed between corporates (and) that has had an adverse impact (on) the world markets," Bhave said.

Noting that the domestic economy is now more integrated with the global markets, Bhave said the regulators will have to act in concert internationally to face the challenges in financial markets.