“India remains, as before, very well governed, (with a) stable government, and a very well-regulated financial market. As a result, investor confidence, which existed before, shall continue even now. Our regulators are normally very-very stringent about governance practices and therefore, one instance, however much talked about globally it may be, is not going to be indicative of how well financial markets are governed. So many lessons have been learnt over the decades and our regulators have kept the markets well in prime and prim condition,” the FM told a TV channel in her first comments since the report by Hindenburg Research hit Adani stocks.
Keeping constant vigil on banking sector, says RBI
A few hours later, the Reserve Bank of India (RBI) issued its first statement on the issue to state that the banking system was stable, and lenders were in compliance with the large exposure framework guidelines, which cap lending to a single business group.
Without naming Adani, the regulator said that it has maintained a constant vigil on the banking sector and on individual banks to maintain financial stability. The central bank said it constantly monitors data on bank exposure to large corporations. “The RBI has a Central Repository of Information on Large Credits (CRILC) database system where the banks report their exposure of Rs 5 crore and above, which is used for monitoring purposes,” it said in a release. The statement came amid repeated attacks from Opposition parties, which have stalled Parliament demanding a probe, while raising questions over LIC and State Bank of India’s exposure to the Adani Group.
Referring to statements by SBI and LIC, Sitharaman said: They have very clearly said that their exposure is well within the permissible limit and with the valuation that they have, they are still sitting over profit.” Besides, she said, Indian banks remain healthy. “In general, both RBI and we know that the Indian banking system, having gone through the twin balance sheet problems, are at a comfortable level. The NPAs are coming down, recovery is happening, and their position is very sound.”
Senior finance ministry officials too sought to comfort stakeholders.