New Delhi: Amid controversy over sanctioning a $1 billion loan to Adani Group, SBI on Thursday said that it has only signed a preliminary MoU and will disburse the money only after proper due diligence.
SBI had on the sidelines of Prime Minister Narendra Modi's visit to Australia, signed a pact sanctioning $1 billion loan to Adani Group's coal project in that country.
"We clarify that this is a memorandum of understanding. This is not a loan sanction that we have given. It will go through proper due diligence both on the credit side as well as on the viability side," SBI Chairperson Arundhati Bhattacharya said.
"So all of that will be done. The board will take a call and then only loan will be given," she said. "We have checked to see that there is no environmental issue, checked to see that the cost of coal. The cost is also currently around $42 FOB which is much better than the current prices in the international market," she said.
Asked about the exposure of SBI if its board approves the loan, Bhattacharya said the net exposure would be to the tune of $200 million as there are some repayments also from the company.
On concerns being raised by environmentalists over the port of the shipment, she said: "We also checked with Queensland's government they have clearly said that there is no environmental issue... the threat to Great Barrier Reef is much more from the star fish attack.
"It is not from the Abbot Point port and today Abbot point coal come at $42 fob (free on board) which is much below better than international prices ruling today and quality of coal is very good. It is non-polluting in nature."
Meanwhile, Congress raised concern over the $1 billion loan to the Adani group for the Carmichael coal mine given during Prime Minister Narendra Modi's just concluded visit of Australia.
"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.
Refuting the charges, a senior official of Adani Group said: "There is already a couple of international banks which have already funded our acquisition of mines in Australia. I don't think it is for public consumption for us to tell which banks are currently considering the project in different stages of approval.
SBI would not certainly be just one bank when it comes to final financial closure of this project and you will see a very impressive list of international banks who are going to fund the project, the official added. The development of the coal mine located at Queensland in Australia and required infrastructure including railways would cost $7.6 billion.
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