Rs. 6,182.64 Crores LIC’s Debt Exposure in Adani Group of Companies as on Date

The Minister of Finance, Smt. Nirmala Sitharaman in a written reply in Lok Sabha Stated, “The Reserve Bank of India (RBI) has informed that under the provisions of section 45E of the Reserve Bank of India Act, 1934, RBI is prohibited from disclosing credit information. Section 45E provides that credit information submitted by a bank shall be treated as confidential and not to be published or otherwise disclosed.”

The Life Insurance Corporation of India (LIC) has informed that its debt exposure to Adani Group of Companies, as per annexed details, was Rs.6,347.32 crore and Rs.6,182.64 crore, as on 31.12.2022 and 5.3.2023, respectively.

The five Public Sector General Insurance companies have informed that these companies do not have loan/credit exposure to Adani Group of Companies.

Public Sector Banks have informed that loans are sanctioned after assessing the viability of projects, prospective cash flows, risk factors and availability of adequate security and repayment of loans are ensured by the revenue generated by the project and not by the market capitalisation of the company.

As per inputs received from RBI, in order to protect banks from risk, it has implemented large exposure framework which limits the exposures that a bank can take to a single counterparty and a group of connected counterparties to 20 per cent (extendable to 25 per cent by the Board of the bank under exceptional circumstances) and 25 per cent, respectively, of the eligible capital base of the bank. Also, as per RBI guidelines, banks are required to have a clear policy regarding the Debt-Equity Ratio for project financing to ensure that promoters bring in equity funds proportionate to bank finance. To address the concentration risk emanating from large exposure to banking system, RBI has stipulated banks to maintain additional provisions and additional risk-weights on the incremental exposures towards specified borrowers having overall aggregate sanction credit limit of ₹10,000 crore.

LIC’s debt exposure in Adani Group of Companies