India’s banking system resilient and strong, says RBI governor amid Adani-Hindenburg controversy
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Mumbai : Amidst the controversy between Adani Group and American short selling firm Hindenburg Research, Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday said that India’s banking system, including non-banking financial companies (NBFCs), remains resilient and strong. After the RBI governor announced the 0.25 per cent hike in the repo rate, Deputy Governor MK Jain said the exposure of domestic banks was against underlying assets, operating cash flows and projects under implementation and was not based on market size.
RBI Governor Shaktikanta Das said that the strength, size and resilience of the Indian banking system is now too strong and large to be affected by such a case. However, during this, the RBI governor did not name the Adani Group. The RBI chief also said that the methods of evaluating banks have improved over the years and mentioned the steps taken by the central bank, including framing of guidelines, setting up of audit and risk management committees.
Governor Shaktikanta Das was asked whether the RBI is considering giving directions to domestic banks regarding losses in Adani Group shares in the context of reports by rating agencies. In response to this, Shaktikanta Das said that with the aim of maintaining financial stability, RBI constantly monitors the banking sector.
Attack on opposition leader Adani Group
Opposition leaders have flagged the huge exposure of public financial bodies like Life Insurance Corporation of India (LIC) and State Bank of India (SBI) to Adani’s shares. The opposition’s comments came after a report by American short-selling firm Hindenburg Research accused the Gautam Adani-led group of stock fraud and accounting fraud over decades.
Adani Group’s market lost more than $ 100 billion
After the Hindenburg report became public, the shares of Adani Group firms started falling and the group’s market cap lost more than $ 100 billion. Not only this, Adani Group Chairman Gautam Adani had to cancel about 2.5 billion FPOs of Adani Enterprises after allegations were made in the short selling firm’s report. However, the process of decline in the shares of some firms of Adani Group has stopped for a few days.
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