India central bank asks local banks for details of Adani exposure

Shares in the Adani group plunged after the conglomerate shelved a $2.5bn share sale

Published : 2 Feb 2023, 05:23 AM
Updated : 2 Feb 2023, 07:09 AM

India's central bank has asked local banks for details of their exposure to the Adani group of companies, government and banking sources said on Thursday.

The Reserve Bank of India (RBI) did not immediately respond to a request for comment.

The sources declined to be identified because they were not authorised to speak to the media.

Shares in Adani group of companies plunged on Thursday after the conglomerate, led by tycoon Gautam Adani, shelved a $2.5 billion share sale amid a turbulent market, citing the need to insulate investors from potential losses.

Information being sought by the RBI includes details of collateral being used to back loans and any indirect exposure banks may have, one of the sources said.

The Indian banking sector's direct exposure to the Adani group was just 0.6%, Societe Generale said in a report on Wednesday. It said markets are "overpricing" the risk to Indian lenders of their exposure to the Adani Group and that a selloff in banking shares seemed overdone.

India's Nifty Bank index has lost 5.4% since the New York-based short-seller released its report. The broader Nifty index (.NSEI) shed up to 2.8% over the period.