The central bank’s official statement comes amid worries in some quarters over bank’s exposure to Adani group companies. The Adani shares have lost nearly $120 billion since the publishing of an adverse report by Hindenburg Research on January 24.
The RBI statement, however, does not mention the name of any group and instead refers to a business conglomerate.
“As per the RBI’s current assessment, the 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 the Large Exposure Framework (LEF) guidelines issued by the RBI,” the statement reads.
Hindenburg fallout: NSE puts Adani firms under Additional Surveillance Mechanism
The central bank added it remains vigilant and continues to monitor the stability of the Indian banking sector.
“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,” the statement added.
A day ago, RBI had sought information from some large banks on their exposure to Adani Group following a rout in stocks of its companies.
Fitch rules out immediate impact on Adani group
Country’s largest lender SBI had said it’s exposure to Adani group is fully secured by cash generating assets. Earlier today, SBI chairman Dinesh Khara said the bank does not envisage the embattled ports-to-mining group facing any challenge to service its debt obligations and stressed that SBI has not given any loans against shares to the group.
Public sector lender Bank of Baroda also said it has reduced exposure to the embattled Adani Group entities over the last two years, and has no concerns on asset quality issues with the conglomerate.
Meawhile, finance minister Nirmala Sitharaman also said she did not expect the ongoing controversy around Adani Group to affect investor confidence as India’s banking system is sound and the financial markets are “well regulated”.
“They have very clearly said that their exposure (to Adani Group stocks) is very well within the permitted limits and with valuation falling as well, they are still over profit. That is the word from the horse’s mouth,” Sitharaman said.
In addition, finance secretary TV Somanathan also assured there was no cause for concern for depositors, policy holders or investors in any nationalised bank or insurance company due to their exposures in Adani group companies.
The going has been tough for the diversified conglomerate over the past week ever since US-based short seller Hindenburg Research levelled a slew of allegations about the group’s operations, calling it the biggest corporate con ever. The Ahmedabad-headquartered group has denied all the allegations but failed to convince analysts and investors.
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