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Adani crisis: RBI finally breaks silence on exposure of banks to Adani Group as crisis deepens

Amid the deepening Adani Group crisis, the RBI said that its current assessment shows that the banking sector in India is resilient and stable.

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Amid growing concerns over the exposure of public sector banks to crisis-hit Adani Group, the Reserve Bank of India (RBI) on Friday (February 3) tried to calm the nerves of investors and general public alike by saying that the central bank is maintaining a tight vigil on the banking sector and on banks too in order to maintain financial stability. It is to be noted that the shares of Adani Group companies started falling after the publishing of a report by US-based short seller Hindenburg Research which has accused the Adani Group of being involved in corporate fraud.

The statement was made by RBI amid reports that concerns were rising among the people over the exposures of banks to the Adani Group. The RBI maintained that India’s banking sector is resilient and stable.

"There have been media reports expressing concern about the exposures of Indian banks to a business conglomerate. As the regulator and supervisor, the RBI maintains a constant vigil on the banking sector and on individual banks with a view to maintain financial stability," said the RBI.

"The RBI has a Central Repository of Information on Large Credits (CRILC) database system where the banks report their exposure of ₹5 crore and above which is used for monitoring purposes,” added RBI.

The RBI said that its current assessment shows that the banking sector in India is resilient and stable. "Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy. Banks are also in compliance with the Large Exposure Framework (LEF) guidelines issued by the RBI," added the central bank.

On Friday, Union Finance Minister Nirmala Sitharaman said in an interview that India’s market was “well regulated”.

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