Home / News / India /  Bank exposure within limits, regulator says

Mumbai: To address concerns surrounding the banking system’s exposure to the Adani group, the Reserve Bank of India clarified on Friday that the 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 the Large Exposure Framework (LEF) guidelines issued by the RBI. The RBI remains vigilant and continues to monitor the stability of the Indian banking sector," RBI said.

In a press release, RBI said that it is issuing this clarification as there have been media reports expressing concern about the exposures of Indian banks to a business conglomerate. The regulator has a Central Repository of Information on Large Credits (CRILC) database system where the banks report their exposure of 5 crore and above which is used for monitoring purposes, it said.

Mint was the first to report on 31 January that RBI has sought details of bank wise exposure to the Adani group. The conglomerate has lost nearly $100 bn in market value ever since the US short seller Hindenburg Research came out with a report alleging, fraud and price manipulation.

On 26 January, Hong Kong-based brokerage and investment group CLSA said that Indian banking exposure is less than 40% of the total Adani group debt. Of that, the exposure of private banks is below 10% of total group debt, while PSU banks have 30% of group debt.

CLSA estimates that the group has a bank debt of 70,000-80,000 crore out of the total 2 trillion of debt at the end of FY22.

Banks like SBI, Bank of Baroda and Punjab National bank have a total exposure of 40,000 crore to Adani Group. All the banks have clarified that their exposure is below the permissible limit and that they are fully backed by assets.

Gopika Gopakumar
Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.
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