MUMBAI: Reserve Bank of India Governor Shaktikanta Das said on Wednesday the crash in share prices of crisis-ridden Adani Group companies will not impact as banks and NBFCs don’t give loans on the basis of market captialisation. They lend to companies on the basis of cash flow, project analysis and other relevant factors.
“The whole perception is coming because of the market capitalisation of shares of the group. Banks don’t lend on the basis of the market cap, but on the strength and fundamentals of companies,” said Das addressing a press conference in Mumbai after announcing a 25 basis points hike in repo rate.
The Governor said the central bank has taken several steps to regulate banks and minimise lending risks. “We don’t discuss individual cases in public domain. Having said that, in last 3-4 years, the RBI has taken a number of steps to strengthen resilience of Indian banks."
"All I would like to add now is that the Indian banking sector and NBFC sector continue to remain resilient and strong,” he said. “Strength and resilience of banks are much larger and stronger to be affected by an individual case. Banking system is strong,” Das added.
Deputy Governor MK Jain said the exposure of Indian banks and NBFCs to Adani Group is insignificant. “Domestic banking exposure is against underlying assets not based on market cap. Exposure, as of now, is not very significant,” said Jain.
As per the RBI, five more banks will join the pilot on the central bank digital currency or e-rupee for retail customers and the project will be extended to nine additional cities. The RBI, which began piloting the central bank digital currency or e-rupee for retail customers in early December with eight banks in five cities, stressed that it doesn’t want to rush with it but favours a slow and steady adoption.
The retail CBDC (Central Bank Digital Currency) is available for only 50,000 users now and of them 5,000 are merchants. The service is being offered on invitation basis by eight banks across five cities now, said Deputy Governor T Rabi Sankar.