- Thursday, November 28, 2024
By: Shubham Ghosh
Shaktikanta Das, governor of Reserve Bank of India (RBI), India’s central bank, on Wednesday (8) said the country’s banking sector continues to be resilient, in an apparent reference to the banks’ exposure to the Adani Group which has found itself in a big spot of bother following an explosive report revealed by Hindenburg Research.
After the RBI chief unveiled its monetary policy recommendations, including a repo rate hike of 25 basis points, deputy governor MK Jain said domestic banks’ exposure was “against underlying assets, operating cash flows, (and) projects under implementation, and not based on market cap”.
“The strength, size and resilience of the Indian banking system now are much stronger and larger to be affected by a case like this,” Das said, without taking the name of Adani.
The RBI governor did not name the Adani Group.
Both the top officials interacted with the media after the RBI’s statement came out on Wednesday morning.
Das also said banks’ appraisal methods had got better over the past few years, and referred to steps taken by the RBI, including framing guidelines and setting up audit- and risk-management bodies.
Opposition leaders in India have flagged the ‘large exposure’ of public financial bodies such as the Life Insurance Corporation and the State Bank of India to Adani stocks.
This happened after a report by US-based short-seller Hindenburg Research that accused the conglomerate of ‘brazen’ accounting fraud and pointed to large debts.
