Indian banks and non banking finance companies (NBFCs) with exposure to the Adani Group are sound and are in compliance with the regulations regarding exposure limits, Reserve Bank of India (RBI) governor Shaktikanta Das said. The perception created by the collapse in equity valuations of the group companies is not a reflection on the banks which lend against assets and cash flows, Das said.
“The strength, size and the resilience (of banks) is now much larger and much stronger to be affected by individual incident or case like this. Also, this whole perception is coming because of the market capitalisation or shares of the group. When banks lend money to a company or a group of companies, they do not lend on the basis of the market capitalisation of that company but on the basis of the strength and fundamentals of the company or in case of a greenfield project the anticipated cash flow.