Country’s largest public lender State Bank of India has given loans of as much as Rs 21,000 crore ($2.6 billion) to Adani Group firms, said a report on Thursday. This is half of what is allowed under rules, reported Bloomberg quoting a source.
SBI’s exposure includes $200 million from its overseas units, said the report. Dinesh Kumar Khara, chairman of SBI, said earlier on Thursday the Adani Group companies were servicing the loans and he doesn’t see an “immediate challenge” to whatever the bank has lent so far.
On Thursday, SBI’s scrip on BSE was trading nearly flat at Rs 527.75.
Earlier on Thursday, Reuters reported that Reserve Bank of India has asked PSU banks for details of their exposure to the Adani Group of companies.
Information being sought by the RBI includes details of collateral being used to back loans and any indirect exposure banks may have, Reuters reported quoting sources.
“There is nothing alarming about Adani exposure and we don’t have any concerns as of now,” Khara told Reuters last week, adding that Adani Group hasn’t raised any recent funds from the bank.
The Indian banking sector’s direct exposure to the Adani group was just 0.6%, Societe Generale said in a report on Wednesday. It said markets are “overpricing” the risk to Indian lenders of their exposure to the Adani Group and that a selloff in banking shares seemed overdone.
Nifty Bank index has lost 5.4% since the New York-based short-seller released its report.
Punjab National Bank has a total exposure of Rs 7,000 crore to Adani Group, but there is currently no worry pertaining to those accounts, the state-run lender’s managing director and chief executive said on Monday.
“Out of Rs 7,000 crore, around Rs 2,500 crore is related to Adani’s airport business,” PNB CEO Atul Kumar Goel told reporters at a virtual press conference after the company’s quarterly results.
“Whatever the exposure we are having is backed by cash flow.”
However, the bank is keeping a “close eye” on the developments pertaining to the news flow around Hindenburg’s research report, Goel said.
With inputs from agencies