Rs. 6,182.64 Crores LIC’s Debt Publicity in Adani Group of Companies as of Date

The Minister of Finance, Smt. Nirmala Sitharaman in a written reply in Lok Sabha Stated, “The Reserve Bank of India (RBI) has informed that below the provisions of section 45E of the Reserve Bank of India Act, 1934, RBI is prohibited from disclosing credit score info. Part 45E supplies that credit score info submitted by a bank shall be handled as confidential and to not be printed or in any other case disclosed.”

The Life Insurance coverage Company of India (LIC) has informed that its debt publicity to Adani Group of Companies, as per annexed particulars, was Rs.6,347.32 crore and Rs.6,182.64 crore, as of 31.12.2022 and 5.3.2023, respectively.

The 5 Public Sector Normal Insurance coverage corporations have informed that these corporations should not have loan/credit score publicity to Adani Group of Companies.

Public Sector Banks have informed that loans are sanctioned after assessing the viability of initiatives, potential money flows, threat components and availability of satisfactory safety and compensation of loans is ensured by the income generated by the challenge and never by the market capitalization of the corporate.

As per inputs obtained from RBI, to shield banks from threat, it has carried out a giant publicity framework that limits the exposures {that a} financial institution can take to a single counterparty and a gaggle of linked counterparties to twenty per cent (extendable to 25 per cent by the Board of the bank beneath distinctive circumstances) and 25 per cent, respectively, of the eligible capital base of the bank. Additionally, as per RBI pointers, banks are required to have transparent coverage relating to the Debt-Fairness Ratio for challenge financing to make sure that promoters herald fairness funds proportionate to bank finance. To handle the focus threat emanating from giant publicity to the banking system, RBI has stipulated banks to maintain extra provisions and extra risk-weights on the incremental exposures in direction of specified debtors having a general combination sanction credit score limit of ₹10,000 crores.

LIC’s debt publicity in Adani Group of Companies