SBI scotches reports of scrapping $1 bn loan pact with Adani

Friday, Mar 13, 2015,21:55 IST By metro vaartha A A A

Mumbai | Speculation is rife that SBI is set to reject Adani Group’s USD 1 billion loan application for its Australian coal project, but the bank chairperson scotched the same saying it’s all gossip. Earlier in the day, news reports from Singapore citing sources said that SBI was preparing to scrap the loan agreement it had signed with the Adani group in last November. When contacted SBI Chairperson Arundhati Bhattacharya said: Its 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. The Adani spokesperson 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.
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. If extended 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 by the bank’s executive committee. At SBI, loans over Rs 400 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 in the committee. Adani Mining is building a 300-km rail line for its mega USD 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 USD 2-billion rail link called the North Galilee Basin Rail that would link Adani’s coal mine with Abbot Point coal terminal.

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