SBI, other banks reviewing Adani group exposure after US bribery charges

While SBI will exercise caution while disbursing future loans to ensure compliance, the review does not mean a change in the lenders' credit approach to the ports-to-energy conglomerate

Top Indian banks are reviewing their exposure to the Adani group after the US Department of Justice levelled bribery charges against Chairman Gautam Adani and several others, news agency Reuters reported citing sources.

 

Public sector lenders, including the State Bank of India (SBI), Bank of India, and Union Bank of India, are reportedly undertaking the exercise. Similarly, private banks such as ICICI Bank, Canara Bank, IDBI Bank, and RBL Bank have joined the effort, according to the report.

 

However, a review would not necessarily mean a change in the lenders’ credit approach to the ports-to-energy conglomerate. Notably, the SBI has the largest exposure to the Adani Group among Indian banks, with sanctioned loans of Rs 338 billion.

 

The Reuters report cited a regulatory source aware of the matter saying that despite the charges against the Adani group, there was no need to panic for the Indian lenders as none of them were overexposed to the group.

 

While SBI won’t stop lending to ongoing Adani projects that are nearing completion, the report claimed that the bank will exercise caution while disbursing future loans to ensure terms and conditions are being met.

 

US prosecutors have indicted Gautam Adani, his nephew Sagar Adani, and six others for allegedly paying $265 million in bribes to unknown Indian government officials for securing solar power contracts with state electricity distribution companies. They are accused of disguising these bribes as ‘development fees’ and making false statements to US investors about their anti-bribery practices, thereby raising over $3 billion between 2021 and 2024.

 

Stocks of several listed Adani group entities suffered after the indictment. The shares regained some ground after a statement by Adani Green Energy, which claimed that three top executives named in the indictment — Gautam Adani, Sagar Adani, and Vneet Jaain — have not been accused of violating the Foreign Corrupt Practices Act (FCPA) in the charges of US authorities.