No Impact On Indian Banking System By “Cases Like This”, RBI Governor On Adani’s Case : Mumbai

Shaktikanta Das, The Reserve Bank Governor, said on Wednesday that the strength, size and rigidity of the Indian Banking System now are much stronger and larger “to be affected by a case like this,” in reference to the Adani Group. Enterprises have been raised in various diggings about Adani Group companies, including about the exposure of lenders to the conglomerate, in the wake of an adverse report by US-predicated short dealer Hindenburg Research that also touched off a massive sell-off in the shares of the companies.

In response to inquiries about the Adani Group, Mr. Das stated that the Reserve Bank of India (RBI) had conducted its own analysis before releasing a statement on Friday in which it characterised the banking industry as robust and adaptable. Without specifically referencing the Adani Group, Mr. Das stated that the Indian Banking Sector was now “far stronger and larger to be damaged by a situation like this.” In response to a question about whether the RBI will provide domestic banks with any recommendations regarding their exposure to Adani Group entities in the context of standing agencies ‘findings regarding banks’ exposure to the Group, he said that the RBI will not.

Briefing intelligencers after the fiscal policy announcement, Mr. Das said that when banks do advance, they take their calls on the fundamentals of a company and the awaited cash overflows from systems. He also made it clear that the requested capitalisation of the company does not have any part to play there. Deputy Governor MK Jain said domestic banks’ exposure is “not truly significant” to the Adani Group and the exposure against shares is “insignificant”. Meanwhile, Mr. Das said that over time, the appraisal styles of the banks have significantly improved. In the last three-four years, the RBI has taken several ways to strengthen the rigidity of banks, including guidelines on governance, examination panels, and trouble operation panels, making it obligatory to appoint top trouble officers and top compliance officers.

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