New Delhi:
The Reserve Bank of India said today that the country’s banking system remains resilient and stable amid concerns over lender exposure to Adani group companies.
“Various parameters related to capital adequacy, asset quality, liquidity, provision coverage and profitability are sound. Banks also comply with the RBI’s Large Exposure Framework guidelines,” the central bank said in a statement.
The RBI said it remains vigilant and continues to monitor the stability of India’s banking sector.
“According to the current assessment of the RBI, the banking sector remains resilient and stable,” the statement read.
The central bank issued the comments because there were “media reports raising concerns about Indian banks’ exposures to a business conglomerate”.
It did not mention the Adani group.
The RBI maintains a database known as the Central Repository of Information on Large Credits, or CRILC, where banks report their exposure of Rs 5 crore and above. The central bank uses the CRILC for monitoring purposes.
Shares of Adani group companies have lost more than half of their market value, or more than $100 billion combined, after US short-seller Hindenburg Research raised allegations of high debt and the use of tax havens.
The ports-to-energy conglomerate, led by Gautam Adani, one of the world’s richest men, rejected the criticism and denied wrongdoing. In a 413-page response, the Adani group said the Hindenburg report was driven by “an ulterior motive” to “create a false market” to enable the US company to make a financial profit.
Adani Enterprises Ltd also called off the sale of Rs 20,000 crore follow-on shares a day after it was fully underwritten. Adani said the company’s board believed that “proceeding with the matter will not be morally correct” amid the market turmoil.
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