The Reserve Bank of India (RBI) on Friday said the banking sector was “resilient and stable” amid concerns over the banking system’s exposure to the Adani Group, which has lost about $100 billion in market value following an explosive report by US short-seller Hindenburg Research.
The RBI said, as the regulator and supervisor, it maintains constant vigil on banking sector and on individual banks to maintain financial stability, ANI reported. It did not name Adani group in its statement.
“There have been media reports expressing concern about exposures of Indian banks to a business conglomerate…As per current assessment, banking sector remains resilient and stable. Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy. Banks are also in compliance with Large Exposure Framework guidelines,” the RBI said.
“RBI has a Central Repository of Information on Large Credits (CRILC) database system where the banks report their exposure of Rs 5 cr&above which is used for monitoring purposes,” the central bank further said.
The Adani Group has lost more than USD 100 billion in market value since US short-seller Hindenburg Research accused it of stock manipulation and accounting fraud. The Adani Group has denied any wrongdoing and has threatened to sue Hindenburg.
In an interview with News18, Finance Minister Nirmala Sitharaman on Friday said public sector financial institutions had released detailed statements showing they had limited exposure to Adani Group and would not be significantly affected by the share crash.
Earlier in the day, SBI said it did not extend any loans against shares to the ports-to-mining group. A top SBI official told PTI that SBI’s total exposure to the Adani Group was 0.88 per cent of the book or about Rs 27,000 crore and it does not envisage any setback on its bets.
SBI chairman Dinesh Khara said the non-fund exposure was limited to letters of credit and performance bank guarantees, and was not related to any equity raising or acquisition activities of the Gautam Adani-led group.
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