Banking sector remains resilient and stable, says RBI amid Adani stocks rout

India's central bank said today that the country's banking system remains resilient and stable amid concerns over creditor exposure to Adani group companies
"Banks are also in compliance with the Large Exposure Framework guidelines issued by the RBI," the central bank said in a statement
Adani claimed that the company's board felt that it would "not be morally right to proceed with this matter"

India's central bank said today that the country's banking system remains resilient and stable amid concerns over creditor exposure to Adani group companies.

"Various parameters related to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy." "Banks are also in compliance with the Large Exposure Framework guidelines issued by the RBI," the central bank said in a statement.

The RBI said it remains cautious and monitors the health of the Indian banking sector. "According to RBI's current assessment, the banking sector remains resilient and stable," it said in a statement.

The central bank issued the comments as there were "media reports expressing concern about the exposure of Indian banks to the trading conglomerate". She did not name the Adani group.

Moody's said its ratings on Adani Ports and Special Economic Zone ( APSE.NS ), Adani Green Energy ( ADNA.NS ) and Adani Transmission ( ADAI.NS ) were unchanged, but also warned that the sale could affect financing options. Banks report their exposures of Rs 5 crore and above to the RBI in a database called the Central Large Credit Information Repository, or CRILC. CRILC is used by the central bank to monitor.

Shares in Adani Group companies have lost more than half their market value, totaling more than $100 billion, following allegations of high levels of debt and use of tax havens by US short seller Hindenburg Research. One of the world's richest men and the head of the energy ports business, Gautam Adani, dismissed the criticism and denied wrongdoing.

Adani vs Hindenburg

In a 413-page response, Adani Group said the Hindenburg report was motivated by an "ulterior motive" to "create a false market" for the US company to profit financially. A day after it was fully subscribed, Adani Enterprises Ltd. canceled its subsequent offer of shares for 20,000 crores. In light of the current market turbulence, Adani claimed that the company's board felt that it would "not be morally right to proceed with this matter".

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