The total exposure of five public sector General Insurance companies under the Adani Group of Companies is Rs 347.64 crore, which is 0.14% of the total AUM (Assets Under Management) of all five companies, the government has told Parliament. The LIC’s exposure is less than 1% of the LIC’s total AUM, it said.
Government officials have been citing the ‘low exposure within permissible limits’ of public sector companies in the Adani Group to justify that there is no need for a Joint Parliamentary Committee (JPC) as demanded by the Opposition.
The entire first half of the budget session of Parliament has been rocked by the demand for a JPC after the Hindenburg report led to crash in shares of the Adani Group companies since late last month.
The government has now put figures on record before Parliament on Monday in an answer after Congress MP Manish Tewari asked a question on the investments in the Adani Group. “Is it a fact that lending to and investment in the Adani Group of Companies from Public Financial Institutions and Public Sector Banks has increased in the last eight years?” Tewari had asked.
In his reply, the Minister of State for Finance, Bhagwat Karad, first cited a press release issued by the Life Insurance Corporation of India on January 30. “As per LIC’s press release, LIC’s total holding under equity and debt is Rs 35,917.31 crore as on 31.12.2022 under Adani group of companies. LIC has also informed that the total Assets Under Management (AUM) by LIC are over Rs 41.66 lakh crore as at 30.09.2022 and the existing LIC’s exposure in the Adani group is 0.975% of LIC’s total AUM at book value,” the MoS Finance has said in his reply in Parliament.
He further said as per data received from Public Sector General Insurance companies, namely New India Assurance Company Limited, United India Insurance Company Limited, National Insurance Company Limited, Oriental Insurance Company Limited and General Insurance Corporation of India “total exposure in Adani Group of Companies as on January 31, 2023 is Rs 347.64 crore which is 0.14% of the total AUM of all the five companies”.
The government did not disclose lending by public sector banks and financial institutions to the Adani Group, citing RBI rules.
“The Reserve Bank of India (RBI) has informed that under the provisions of section 45E of the Reserve Bank of India Act, 1934, RBI is prohibited from disclosing credit information. Section 45E provides that credit information submitted by a bank shall be treated as confidential and not to be published or otherwise disclosed,” the minister said in his reply.
Section 45NB of RBI Act provides that any information submitted by non-banking financial company shall be treated confidential and not to be published or otherwise disclosed, the minister added.
“With regard to other financial institutions, namely, Exim Bank, Small Industries Development Bank of India, National Housing Bank, National Bank for Financing Infrastructure, National Bank for Agriculture and Rural Development, these financial institutions are bound by provisions of the concerned Acts, and are prohibited from divulging any information relating to, or to the affairs of, their constituents,” the government has added.
“LIC’s total holding under equity & debt is Rs 35,917.31 crore as on 31.12.2022” That was 31st Dec 2022Ques is how much did LIC & other insurance companies put in when market was going South to shore up stock Jan end?Lending by Bank’s & FI’s answer is a cop out @AmanKayamHai_ https://t.co/2ykSxwDIHq— Manish Tewari (@ManishTewari) February 13, 2023
Responding to the story, Tewari tweeted: “LIC’s total holding under equity & debt is Rs 35,917.31 crore as on 31.12.2022” That was 31st Dec 2022. Ques is how much did LIC & other insurance companies put in when market was going South to shore up stock Jan end?”
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