regular-article-logo Thursday, 08 June 2023

Nirmala Sitharaman wards off Adani queries

Under section 45E of RBI Act, banking regulator said it was 'prohibited from disclosing credit information', says Finance Minister

Our Bureau Mumbai/New Delhi Published 14.03.23, 02:36 AM
Nirmala Sitharaman

Nirmala Sitharaman File picture

The Centre on Monday fobbed off a question raised during question hour in the Lok Sabha seeking information about the total exposure of banks and insurance companies to the overall debt of the Adani group.

In a written reply, finance minister Nirmala Sitharaman said that under section 45E of the RBI Act, the banking regulator said it was “prohibited from disclosing credit information”.


“Section 45E provides that credit information submitted by a bank shall be treated as confidential and not be published or otherwise disclosed,” Sitharaman said in her reply.

She, however, said Life Insurance Corporation of India (LIC) had informed that its debt exposure to Adani Group of Companies “was Rs 6,347.32 crore and Rs 6,182.64 crore, as on 31.12.2022 and 5.3.2023, respectively.”

The five public sector general insurance companies have informed that these companies do not have loan/credit exposure to Adani Group of Companies, she added.

The RBI said it had implemented a framework for large exposures by banks “which limits the exposures that a bank can take to a single counterparty and a group of connected counterparties to 20 per cent (extendable to 25 per cent by the Board of the bank under exceptional circumstances) and 25 per cent, respectively, of the eligible capital base of the bank.”

Junior finance minister Pankaj Chaudhury told the Lok Sabha the government has not set up any committee to probe allegations of US short seller Hindenburg against the Adani Group, but stock market regulator Sebiis investigating market allegations against the group.

A separate investigation into imports of Indonesian coal by the conglomerate hasn’t reached finality.

The Lok Sabha saw several questions being put by MPs to the government on the Adani issue, which were replied through written responses by the minister.

Adani Electricity

Fitch Ratings on Monday affirmed the credit rating of Adani Electricity Mumbai, saying the Hindenburg Research report alleging governance issues at the Adani group has a limited near-term impact on the company’s cost of funding.

In a statement, the rating agency said, it has affirmed the“BBB-” rating on Adani Electricity Mumbai Ltd (AEML)US dollar senior secured notes due 2030.

It has also affirmed AEML’s $2-billion global medium-term note programme.

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