Home >Industry >Banking >SBI chief defends MoU with Adani Group for $1 billion loan

New Delhi: State Bank of India (SBI) on Thursday defended its decision to lend $1 billion to the Adani Group to fund its coal project in Australia, saying there were no viability or environmental issues clouding the development of the Carmichael coal mine in Queensland state.

SBI chairperson Arundhati Bhattacharya also clarified that the bank had only signed an in-principle agreement with the Adani Group, whose founder Gautam Adani is perceived to be close to Prime Minister Narendra Modi, on the loan and hadn’t yet sanctioned the money.

“There are no environmental issues. The Queensland government has very clearly said that there is much more threat to Great Barrier Reef from farm run-offs and star fish attacks. There are no viability issues also," Bhattacharya said.

“Coal is available at $42 (per tonne) FOB (free on board), which is better than international prices that is around $62 (per tonne). The quality of coal is excellent and it is much better than what we are getting locally now…it is much less polluting," she said.

On Thursday, the Congress party questioned SBI’s decision to give the loan to Adani Group.

“What was the propriety of the SBI giving the loan to Adani, who was sitting next to Prime Minister during the (Australian) visit, at a time when some five foreign banks have denied credit to the group for the project," party general secretary Ajay Maken said.

He alleged that the Prime Minister appeared to be taking keen interest in “promoting" Adani for getting the loan.

Bhattacharya added that the bank had signed only a memorandum of understanding (MoU) with the Adani Group so far.

“It is an MoU. It is not a loan sanction that we have given. It will go through a proper due diligence both on the credit side as well as on the viability side. The board has to take a call and then only the money will be given," she added.

PTI contributed to this story.

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