RBI asks large banks for information on exposure to Adani Group

The RBI has sought information from some large banks on their exposure to Adani Group following a rout in stocks of its companies.

A senior banker told that the central bank already has a fair idea of the banking industry’s exposure to the group, thanks to the Central Repository of Information on Large Credits. However, since the exposure to the group was a large chunk of bank credit, the RBI wanted to get an idea of the liquidity position, the sanctioned limits and the extent to which loans are secured.

The concern is whether there are any triggers for re-rating and whether the volatility in the international market could create liquidity issues. Bankers said that most of the group companies are sound cash-generating businesses with secured assets. However, there are several greenfield projects that require large investments for capital expenditure.

Indian banks are not directly impacted by the fall in the share price as they have not provided finance for leveraged buyouts (where the shares are the security) as RBI rules do not permit such financing. Adani Group companies have not faced any problem in servicing their debt. A substantial portion of the company’s debt is in the form of bonds issued in international markets.