“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, will continue now. Our regulators are normally very very strict on governance practices and therefore, one case, no matter how much it is talked about globally, will not be indicative of how well the financial markets are governed. So many lessons have been learned over the decades and our regulators have kept the markets in peak and perfect shape,” FM told a TV channel in its first comments since the Hindenburg Research report hit Adani stocks.
Maintain constant vigilance over the banking sector, says RBI
A few hours later, the Reserve Bank of India (RBI) released its first statement on the matter to say that the banking system was stable and that lenders were compliant with the guidelines of the Large Exposures Framework, which limit lending to a single corporate group.
Without naming Adani, the regulator said he maintained constant vigilance over the banking sector and individual banks to maintain financial stability. The central bank said it is constantly monitoring data on the bank’s exposure to large corporations. “The RBI has a Central Repository of Information on Large Credits (CRILC) database system where banks report their exposure of Rs 5 crore and above, which is used for monitoring purposes,” it said in a statement. The statement came amid repeated attacks from opposition parties, which blocked Parliament demanding an investigation, while raising questions about the exposure of the LIC and the State Bank of India to the Adani group.
Referring to the statements of SBI and LIC, Sitharaman said, They have stated very clearly that their exposure is well within the allowable limit and with the valuation they have, they are still sitting on profit. Furthermore, she said, Indian banks remain healthy. “Overall, both RBI and we know that Indian banking system, after going through double balance sheet issues, is at a satisfactory level. NPAs are falling, the recovery is happening and their position is very strong.”
Senior finance ministry officials have also tried to comfort interested parties.
