Banking sector resilient and stable: RBI on Adani stocks rout

The US investor research firm - Hindenburg Research allegations that Adani Group was "engaged in a brazen stock manipulation and accounting fraud", caused a huge dent on the Adani Group firms' assets.

New Delhi, Feb 03: The Reserve Bank of India on Friday said the country's banking system remains resilient and stable, amid concerns about the exposure of lenders to Adani group companies.

"There have been media reports expressing concern about the exposures of Indian banks to a business conglomerate," RBI said in a statement.

"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 ₹5 crore and above which is used for monitoring purposes," the statement read.

"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," it added.

"The RBI remains vigilant and continues to monitor the stability of the Indian banking secton," the statement said.

The US investor research firm - Hindenburg Research allegations that Adani Group was "engaged in a brazen stock manipulation and accounting fraud", caused a huge dent on the Adani Group firms' assets.

The firm accused Adani of accounting fraud and artificially boosting its share prices, calling it a "brazen stock manipulation and accounting fraud scheme" and "the largest con in corporate history".

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 has an overall exposure of Rs 27,000 crore in Adani group which is 0.88% of the loan book as on 31st Dec 2022. The loans are against assets and businesses that are cash-generating. So, we don't see any challenge, no cause of concern for us," said SBI Chief Dinesh Khara.

"The overall exposure to Adani Group is at one-fourth of the ceiling set under a large exposure framework. The exposure has come down over the past 3 years. 30% of exposure is either secured by a guarantee from a PSU or is to a joint venture with a PSU," said Bank of Baroda.