RBI reviews local bank loans to Adani firms

The Reserve Bank of India (RBI) is examining the utilization of sanctioned bank loans by the Adani group to determine if the company is relying excessively on domestic lenders to fund its operations and expansion plans, a banker aware of the development said.

- Shayan Ghosh

The banker said RBI supervisors overseeing some banks are even requesting Adani group loan data twice weekly, including sanctioned fund-based and non-fund-based limits and their utilization.

Fund-based instruments include credit lines, while non-fund limits comprise bank guarantees and letters of credit.

Mint reported on Monday that RBI is closely monitoring Adani's bank loans.

"RBI is looking very closely at whether the group is drawing more funds from banks.

These are not fresh loans but are limits already sanctioned by lenders. The regulator has not said how long we have to keep submitting this data," the banker said.

He added that RBI wants to use it as a proxy for any imminent stress in the group that could affect the banking sector. An increase in the utilization of limits would mean that the companies are in need of more funds from local banks and not tapping other sources, the banker said.