Country’s largest lender State Bank of India (SBI) has an exposure of `27,000 crore to the Adani Group, consisting of 0.9% of its total loan book, the bank’s chairman, Dinesh Khara, said. The bank’s gross advances stood at `31.3 trillion as of December 31.
The loan amount extended to the group includes fund-based and non-fund-based exposure, Khara said in a post-earnings media call.
The group has also met its repayment obligations and SBI does not expect impairment in the conglomerate’s ability to service those loans, he said, adding that the bank has issued loans to the group for projects which are backed by tangible assets and adequate cash generation. SBI has not received any request for refinancing its loans from Adani Group, he said. “We have not extended any loans against shares. So the fall in stock market prices will not impact any of the margin calls and any of the loans that they have raised from us,” Khara said.
Separately, the Reserve Bank of India said the banks are in compliance with the large exposure framework (LEF) guidelines on exposure to group companies. As per the central bank norms, the exposure of a bank to a group of connected counterparties must be lower than 25% of the lender’s capital base.
The RBI had earlier this week sought details about lenders’ exposure to the Group.
While Bank of Baroda did not disclose any numbers, its overall exposure to Adani Group is 25% of the single group exposures allowed under the LEF. Meanwhile, IndusInd Bank had earlier clarified that its total loan outstanding towards Adani Group is 0.49% of the
loan book. The bank’s gross advances stood at `2.7 trillion as of December 31.
No issues with exposure, says BoB chief
Bank of Baroda managing director and chief executive officer Sanjiv Chadha on Friday said there are currently no issues with regard to the lender’s exposure to large corporates. He did not specifically name Adani Group.
“We do not comment on specific accounts. But, our exposure to the business conglomerate under discussion is currently at one-fourth of Reserve Bank of India’s large exposure framework ceiling. As a percentage of the balance sheet, the exposure to this conglomerate has come down over the last three years. Of the exposure that is there, 30% is either in joint venture of public sector companies or secured by a guarantee of public sector companies,” Chadha said.
“It is still early days but there are no issues at the moment. When we lend to large groups, one of the ways to manage risk is to ensure that the large group has the advantage of being a diversified group. That would make sure that the exposure is spread across a large group of companies. As of now, if you look at a broader corporate loan portfolio including this book, it has been performing very well. Given where the banking sector is and the nature of business that diversified groups do, I do not think that the corporate loan portfolio is a matter of concern for banks at all.”