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SBI is lending Rs 6,ooo crore to Adani Mining
The biggest news in Indian Banking sector is here-
State Bank of India, the country's biggest lender, on Thursday said it will do "proper due diligence" before sanctioning the $1-billion (about Rs 6,000 crore) loan to Adani Mining, the Australian subsidiary of Adani Enterprises, for its mine project in Queensland. SBI chairman Arundhati Bhattacharya clarified that at present the bank has only entered into a memorandum of understanding (MoU) with the group. However, SBI finding difficulty to recover loan given to Mallya. People are amazed over loan of 65000 crore on 3000 crore turnover! How many lakhs of crore's Public Sector banks have squandered in this fashion! A true example of 'ameer aur ameer hote gaye, garib aur garib'. But such feelings are not good for business market. Business need investment, planing, lending, interest, involvement of mass, export and import.
Achhe din aa gaye!
"It will go through proper due diligence both on the credit side as well as on the viability side. So, all of that will be done," Bhattacharya said. "The board will take a call and then only the loan will be sanctioned." She said that if the board approves the loan, SBI's net exposure would be to the tune of $200 million, as there will be some repayments also from the company. Adani had signed a MoU to line up a loan of up to $1 billion from SBI for the Carmichael mine in Queensland. Adani is getting prize money for helping PM Modi in last general election ? The project is expected to be completed by the end of 2017. The loan was announced when the group's head Gautam Adani was in Brisbane with a business delegation accompanying Prime Minister Narendra Modi for the G20 summit. The state-run bank had run into severe criticism for entering into the agreement because several foreign lenders had refused to provide lending support to the group, citing environmental concerns. But Bhattacharya defended the bank's stance, saying they have checked with the Queensland government and "they have clearly said that there is no environmental issue and the threat to the Great Barrier Reef is much more from the star fish attack". Bhattacharya also defended the viability of the project. "Today, Abbot pointed coal comes at $42 fob (free-on-board), which is much below the international prices and the quality of coal is very good. It is non-polluting in nature," she said. The Congress party had on Thursday questioned SBI's decision to lend to the project and alleged that that the PM appeared taking keen interest in "promoting" Adani in getting the loan worth Rs 6,200 crore during the visit in which the SBI chairman was also present. "What was the propriety of the SBI giving the loan to Adani, who was sitting next to prime minister during the visit, at a time when some five foreign banks have denied credit to the group for the project?" party General Secretary Ajay Maken said. SBI had signed the pact on the sidelines of Modi's visit to Australia.
People still questions..
How was such a loan given to him?
Why not to me?
I would like to do business in Australia with 10 crore loan,
I have a turnover of 20 lacs annually and ratio isnt much different.
What if I fail,
the government will bail me out the same way it will bail him out?
SBI does not expect the RBI to cut rates on December 2 but feels the central bank could soften its stance by the end of the current fiscal."The fact of the matter is that all the parameters are indicating that there will be further fall in inflation. Between November and January, with the base effect, it might go up a little bit. But by March, it will be well below whatever the glide path that is indicated by the RBI," Bhattacharya said. In fact Australia itself have committed a much bigger money to develop linkage of this mine from the govt funds. Opposition is playing with the issue in general public, but investment is necessity for sustainable growth of market.
Tags:
SBI|Narendra Modi|General Secretary|Congress|Arundhati Bhattacharya|Ajay Maken|Adani Group cautious, giving, crore, Adani, Mining
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