Irrational to connect fortunes of one company with PSBs: TV Somanathan

“I will only speak from the point of view of the banks, the financial institutions. I am not here to comment on the finances good or bad of any private sector company, not my business, not something is the government’s business either,” says TV Somanathan, Finance Secretary.

It is a budget that has been applauded. It has got a 10 on 10 from I think every CEO that we have interviewed today. The markets give a very different reaction for a very different reason, we can talk about that at another time. But what was the mandate that spend more money and just make sure that we have more whether it is through disinvestment or through tax buoyancy?
No, I think the mandate given to us was to do what it takes to see that the economy continues to be one of the world’s fastest growing economies which should also be macro economically stable and takes care of those whom the economy might leave behind. So the underprivileged, women, particularly vulnerable tribal groups, farmers, those who are members of cooperatives. So there is a lot of emphasis on the budget in balancing these three considerations, that is, pushing growth, maintaining macroeconomic stability and making sure that nobody is left behind.

Should banks be concerned about the exposure to the Adani Group?
I will only speak from the point of view of the banks, the financial institutions. I am not here to comment on the finances good or bad of any private sector company, not my business, not something is the government’s business either. But just in terms of the banks and the financial institutions, I think the exposure to any one company is so small that to connect the fortunes of any one company with those of either

or nationalised banks is I think not very justified or rational.

The total exposures are small and yes there are always companies that do well and companies that do badly. Institutions spread their investments across a big portfolio and there is less than 1% concentration of any one company at this moment which in the portfolio of any of these financial institutions.

So I do not think that is a big enough concern, in fact I do not think that is a reason for influencing the prices of public sector banks in the days to come. So I personally do not think that is a valid logical chain of reasoning to connect a particular company with the fate of a public sector banks. I think the numbers involved are too small to make such a connection.