Even as the State Bank of India has come under criticism from the Congress party for its decision to lend $1 billion to Adani Mining, the Australian subsidiary of Adani Enterprises, for its project in Queensland, SBI chairperson Arundhati Bhattacharya said the project will be viable providing good quality coal at low prices. Speaking to reporters after a review meeting with finance minister Arun Jaitley, she also expressed hope the RBI would consider a cut in key rates by the end of the fiscal. Excerpts:
The Congress party has questioned SBI’s decision provide loan to the Adani Group for development of Carmichael coal mine?
There are no environmental issues. Greenpeace can raise concerns anywhere but the Queensland government has said that there is more threat to the Great Barrier Reef from farm run-offs and star fish attacks than from the Abbot Point port. They have looked into it in great detail and this is an issue that I have checked with the deputy premier of Queensland. He has said there are no environmental issues.
Will the project be viable?
Over there, coal is available at $42 FOB (freight on board) whereas even today, globally the minimum price for coal is $62. So there is no viability issue. The quality of coal is also excellent and it is of a non-polluting nature. For us, this is just an MoU and not a loan sanction. Before sanctioning, the project will have to go through proper due diligence on the credit as well as viability. The board will also take a call and only then money will be given.
What is your expectation on a rate cut now that inflation is easing?
That is a question that the Reserve Bank of India can only answer. But the fact is that all parameters indicate that there will be a further fall in inflation. Between November and January, with the base effect, it might go up a little bit. But by March, it will be well below the path indicated by the RBI. The RBI Governor has repeatedly said that he will be data driven so hopefully we can hope to see some kind of a turn in the rate cycle, possibly by the end of the fiscal.
Nearly 75 per cent of bank accounts under the Jan-Dhan Yojana are dormant…
Yes, transactions are not taking place. But we will have to guide people. There also have to be financial literacy classes. Also, once the direct benefit transfers start flowing, many of these accounts will see transactions. Remember, this is just the first phase, we had started the scheme on August 15. We can not expect thing to happen overnight but we have hope that many of these accounts will become operational over a period of time.