CHENNAI One client will not affect Indian banking system.  An individual client (Adani Group) will not bring down the Indian banking system as the country's banking sector is resilient and strong, Reserve Bank of India (RBI) Governor Shaktikanta Das said.

The RBI Governor  responded that the Indian banking system is robust and won't be impacted by a single client when asked about the Indian bank's exposure to the Adani Group and the opinions of credit rating agencies.

He said, banks do not base their lending decisions on a company's market capitalization but rather on the project's fundamentals. He also said that Indian banks' processes for credit appraisal had changed.

He claims that the RBI rationalised the big exposure standards for banks two years ago, and the standards are being followed.

Mahesh Kumar Jain, deputy governor of the RBI, added that the exposure of banks is based on underlying assets and that the sector's exposure to shares is negligible.

Fitch Ratings and Moody's Investors Service, two prominent international credit rating agencies, stated on Tuesday that the exposure of Indian banks to the Adani Group does not pose a significant risk to the institutions' independent credit profiles.

"Banks' exposures to Adani are not substantial enough to significantly impair their credit quality. Our estimation is that their exposure to Adani does not exceed 1% of their total loan volume. Although we believe that public sector banks have greater exposures than private sector banks, for the majority of banks, they represent less than 1% of total loans "said Moody's.

The economic and sovereign ramifications of the Adani dispute, according to Fitch Ratings, are still minimal. There is a chance that the controversy's repercussions may spread and affect India's sovereign rating, which will have an impact on bank issuer default ratings.

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