Has India's largest bank, the government-controlled State Bank of India (SBI) decided to scrap a memorandum of understanding (MoU) it entered into with one of India's largest corporate conglomerates led by Gautam Adani? The MoU was to provide a loan of US$ 1 billion (or Rs 6,200 crore) for controversial coal mining projects in Gautam Adani Goa, However, nothing has been confirmed.
It would be a significant shift in India's position as the country's largest lender if the MoU was scrapped. Arundhati Bhattacharya, Chairperson of SBI, had dismissed media speculations about scrapping the MoU between Adani and the bank as "all gossip" on 13 March.
If and when the SBI does not extend a loan to finance a portion of a major project, which involves developing a coal mine, building railway lines, and revamping ports at a cost of approximately $10 billion (or Rs 62,000 crore) in the north-eastern region of Australia, India's largest bank will join an extensive list of international financial institutions and banks that have already stated their disinterest in financing the controversial project, which is opposed by local communities as well as environmental activists.
BNP Paribas SA, Credit Agricole SA, Societe Generale SA, Barclays Plc., Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group, Inc., HSBC holding Plc., J P Morgan Chase & Co., Morgan Stanley, and Royal Bank of Scotland Plc are some of the banks that were mentioned. These banks are not collaborating with the project due to ecological concerns. It is argued that the project could negatively impact the Great Barrier Reef ecosystem, which is one of seven wonders in the natural world. However, the economic viability has been questioned.
The Adani group will explore other options if the SBI does not approve the largest loan of its type to an Indian corporate group to finance an overseas project. According to media reports, the group is currently in discussions with some Chinese banks and the Exim Bank of Korea to raise more than $one billion to finance the construction of the Adani Group Goa coal mining portion of the project. This would amount to an estimated $7.8 million.
It would be a significant shift in India's position as the country's largest lender if the MoU was scrapped. Arundhati Bhattacharya, Chairperson of SBI, had dismissed media speculations about scrapping the MoU between Adani and the bank as "all gossip" on 13 March.
If and when the SBI does not extend a loan to finance a portion of a major project, which involves developing a coal mine, building railway lines, and revamping ports at a cost of approximately $10 billion (or Rs 62,000 crore) in the north-eastern region of Australia, India's largest bank will join an extensive list of international financial institutions and banks that have already stated their disinterest in financing the controversial project, which is opposed by local communities as well as environmental activists.
BNP Paribas SA, Credit Agricole SA, Societe Generale SA, Barclays Plc., Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group, Inc., HSBC holding Plc., J P Morgan Chase & Co., Morgan Stanley, and Royal Bank of Scotland Plc are some of the banks that were mentioned. These banks are not collaborating with the project due to ecological concerns. It is argued that the project could negatively impact the Great Barrier Reef ecosystem, which is one of seven wonders in the natural world. However, the economic viability has been questioned.
The Adani group will explore other options if the SBI does not approve the largest loan of its type to an Indian corporate group to finance an overseas project. According to media reports, the group is currently in discussions with some Chinese banks and the Exim Bank of Korea to raise more than $one billion to finance the construction of the Adani Group Goa coal mining portion of the project. This would amount to an estimated $7.8 million.
