Adani stock rout: RBI allays concerns, says banking sector resilient and stable

New Delhi: Allaying concerns over the exposure of lenders to the embattled Adani Group, the Reserve Bank of India on Friday stated that the country’s banking system 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 guidelines issued by the RBI,” the central bank said.
The RBI stated that it remains vigilant and continues to monitor the stability of the country’s banking sector.
“As the regulator and supervisor, the RBI maintains a constant vigil on the banking sector and on individual banks with a view to maintain financial stability. The RBI has a Central Repository of Information on Large Credits (CRILC) database system where the banks report their exposure of Rs 5 crore and above which is used for monitoring purposes,” it said.
Without naming the Adani Group, the RBI said it was issuing the comments as there had “been media reports expressing concern about the exposures of Indian banks to a business conglomerate”.
The RBI statement comes a day after it was reported that the central bank has sought details from banks about their exposure to the group.
Seven listed firms of Adani Group have lost about half their market value – or more than USD 100 billion combined – since US-based investor research firm Hindenburg Research last week accused the Gautam Adani-led conglomerate of “brazen stock manipulation and accounting fraud scheme over the course of decades”.
Adani Group, however, has rejected the criticism and denied wrongdoing.
Adani, who until recently was the richest Indian in the world, has now slipped to 22nd spot in the Forbes Real-time billionaire list for 2023.
Meanwhile, the country’s largest lender SBI said its overall exposure to the Adani Group is at 0.88 per cent of the book or around Rs 27,000 crore. SBI chairman Dinesh Khara said the bank does not envisage the conglomerate facing any challenge to service its debt obligations and stressed that SBI has not given any loans against shares to the group.
Punjab National Bank (PNB) said its total exposure to the Adani Group of Rs 7,000 crore is backed by adequate cash flows and there is no worry on repayments at present. Bank of Baroda has an exposure of Rs 4,000 crore. Other banks have not yet disclosed their exposure.


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