On 3 February 2023, India.com reported that RBI asked local banks for details of their exposure to the Adani Group. RBI also earlier said that India’s banking system remains resilient and stable amid the crisis.
New Delhi: The Reserve Bank of India (RBI) is scrutinizing the utilization of sanctioned bank loans by the Adani Group to determine if the company is relying excessively on domestic lenders to fund its operations and expansion plans, the Mint reported quoting a banker aware of the development. It is said that the RBI supervisors overseeing certain banks are even requesting Adani Group loan data twice weekly, including sanctioned fund-based and non-fund-based limits and their utilization.
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On 3 February 2023, India.com reported that RBI asked local banks for details of their exposure to the Adani Group. RBI also earlier said that India’s banking system remains resilient and stable amid the crisis.
“RBI is looking very closely at whether the group is drawing more funds from banks. These are not fresh loans but are limits already sanctioned by lenders. The regulator has not said how long we have to keep submitting this data,” the Mint reported. It also added that RBI wants to use it as a proxy for any imminent stress in the group that could affect the banking sector. An increase in the utilization of limits would mean that the companies are in need of more funds from local banks and not tapping other sources, the report said.
Banks can lend up to 25 per cent of their total tier 1 capital to a connected group of companies and 20 per cent to a standalone entity under RBI’s large exposure framework.
Adani Group’s chief financial officer Jugeshinder Singh, who spoke to Bloomberg on Tuesday on the sidelines of a roadshow for investors in Hong Kong, said that the group is not seeking to refinance the debt or inject capital.
On Monday, it was reported that senior Adani executives would present to investors a strategy that includes liquidity planning for the next three years, a roadmap for repaying or pre-paying maturities, among other plans.
The embattled business conglomerate seems to be pulling out all its cards as its listed companies have been witnessing a freefall in the market ever since US-based short seller Hindenburg Research on 24 January 2023 published a report accusing Gautam Adani and his business empire of improper use of offshore tax havens, and stock manipulation.
