SBI rebuts reports of killing Adani's $1-bn loan proposal
14 March 2015
The State Bank of India has denied reports emerging on Friday that it had decided to scotch the Adani Group's $1-billion loan application for its Australian coal project, but admitted that the proposal is in limbo.
When contacted, SBI chairperson Arundhati Bhattacharya told PTI, "It's all gossip. There is no fact [in news reports]."
A senior bank official, however, said that the loan proposal has not progressed from both ends as "neither the company has come back to the bank nor the proposal has reached the credit committee of the bank so far".
Adani Enterprises did not respond to repeated calls.
The much-touted agreement, inked during Prime Minister Narendra Modi's visit to Australia last November, had created a ruckus in Parliament as the opposition had questioned "the propriety of SBI giving the loan to Adani at a time when some five foreign banks have denied credit to the group for the project" (See: SBI defends $1bn Adani loan against 'crony capitalism' charge).
If it goes through, this would be the largest loan by a state-run bank to a domestic company for an overseas project.
Last December, Bhattacharya had said that the proposal would go through due deliberations by the bank's executive committee.
At SBI, loans over Rs400 crore are generally cleared by the executive committee headed by the chairperson. The other members of the executive committee include two managing directors and non-executive directors. That apart, a Reserve Bank nominee director (at present deputy governor Urjit R Patel) is also on the committee.
Adani Mining is building a 300-km rail line for its $16-billion Carmichael coal mine project in Australia's Queensland state.
The project requires a railhead and a coal terminal at Abbot Point. The Queensland state's Coordinator General had already approved the $2-billion rail link called the North Galilee Basin Rail that would link Adani's coal mine with Abbot Point coal terminal.
The original report was generated by Reuters news agency from Singapore, citing unnamed sources. (See: SBI to refuse Adani loan for Queensland project: report)