Indian lenders, including State Bank of India (SBI.NS), are reassessing their exposure to the Adani Group. They are considering whether to strengthen their due diligence procedures when granting new loans, following U.S. accusations of bribery against Chairman Gautam Adani, according to eight bankers.
Other banks such as Bank of India, Union Bank, ICICI Bank, Canara Bank, IDBI Bank, and RBL Bank, which have relatively smaller ties to the group, are also conducting similar evaluations. A review of the situation is unlikely to change the lenders’ credit policies regarding the group.
A regulatory source familiar with the situation stated that, from a banking system perspective, there is no need for alarm, as no institution is currently overexposed to the group.
The Reserve Bank of India did not respond to an email requesting comments.
According to IIFL Securities, a brokerage, State Bank of India (SBI) has the largest exposure to the Adani Group among Indian banks. SBI has sanctioned loans totaling 338 billion rupees ($4 billion) to the group.
SBI will continue lending to Adani projects that are close to completion, according to sources. However, the bank will approach loan disbursement with caution to ensure the group meets all terms and conditions.
Bankers preferred to remain anonymous because they were not authorized to speak to the media. Neither SBI, nor the identified lenders, nor the Adani Group responded immediately to an email requesting comments.
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