After Hindenburg Report, RBI Keeping Close Watch On Top 20 Conglomerates

One of the people familiar with the matter said to take preventive steps to prevent a build-up of stress that would be transmitted to banks’ balance sheets in the future. After the Hindenburg Report, the RBI stated it will keep a close watch on the top 20 conglomerates.

The Reserve Bank of India (RBI) is keeping a close watch on the top 20 business houses that have the largest borrowings from banks to identify risks in advance, said people with knowledge of the matter.

This increased vigilance is in addition to the routine monitoring of systemically important financial intermediaries and the Central Repository of Information on Large Credits (CRILC).

The RBI, also the banking sector regulator, is closely monitoring profitability and other financial performance measures of these conglomerates and their companies besides parameters such as the quantum of debt raised from other sources like external commercial borrowings or bonds for any signs of stress.

“A monitoring system was put in place to catch any build-up of stress so that preventive steps can be taken to prevent its transmission to banks’ balance sheets in the future,” said one of the persons cited. The central bank is keen to deepen supervision.

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