Indian banks' exposure of loans against shares to the embattled Adani Group is not very significant, a deputy governor of the central bank said on Wednesday, allaying concerns that lenders could be hurt as a result of a massive sell-off in the conglomerate.
Investors have been worried about various banks' exposure to the Adani Group ever since late January when U.S.-based short-seller Hindenburg Research alleged improper use of offshore tax havens and stock manipulation by the conglomerate.
The Adani group has denied wrongdoing, but saw more than $110 billion wiped off the conglomerate's market value since the report was released.
"Our domestic banks' exposure (to the Adani Group) is against underlying assets, the operating cash flows and projects under implementation and not based on the market capitalisation," deputy governor Mahesh Kumar Jain said at a press conference following the Monetary Policy Committee's interest rate decision.
While not revealing the banking system's total exposure to the group, RBI governor Shaktikanta Das said that Indian lenders are resilient.
"The size and resilience of the Indian banking system is now much larger and much stronger to be affected by any individual case," said Das, in a response to a question about the exposure of the banking system to the Adani Group.
