Prime Minister Narendra Modi addresses a business breakfast hosted by the Premier of Queensland, Campbell Newman, in Brisbane, Australia. Industrialist Gautam Adani is also seen. (PTI Photo)

Congress calls it ‘crony capitalism’

NEW DELHI: Amid controversy over sanctioning a $1 billion loan to Adani group , SBI on Thursday said 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 here."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 USD 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."Congress on Thursday questioned the decision of State Bank of India to give $1 billion loan to Adani group for the development of Carmichael coal mine during Prime Minister Narendra Modi's just concluded visit to 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 told reporters.He alleged that the Prime Minister appeared taking keen interest in "promoting" Adani in getting the loan worth Rs 6,200 crore during the visit in which the SBI chairman was also present.Questioning the logic behind the huge loan to the Adani, Maken wondered why the SBI was not showing the Memorandum of Understanding (MoU) signed with the Adanis for the project."When five top foreign banks have already declined to fund Adani's project, what was the need and the sense in giving such a huge loan to him from the hard-earned money deposited by the common people?"Did the SBI do the due diligence? If it did so why it is not declaring the MoU? On what conditions it was done? And what was the liability?" Maken, who is also chairman of the AICC media department, said.He also saw contradictions in the Prime Minister's thrust on the coal mining in Australia and the coal minister Piyush Goyal's statement that India will be able to stop import of coal in the next two years."Whether the Prime Minister is saying the right thing or the coal minister? The Prime Minister had said that the whole of India would be lighted with the Australian coal. The coal minister said that possibly in next two to three years India would be able to stop the import of coal," he asked.Reports said that the SBI has decided to lend up to USD one billion to Adani Mining, the Australian subsidiary of Adani Enterprises for the Carmichael mine in Queensland, Australia which has massive blocks of untapped coal reserves. The company aims to build the project by end of 2017.The loan as and when it is extended would be one of the largest given out by an Indian bank for a foreign project.Replying to a question, Maken indicated that Congress could raise the issue in a big way in Parliament along with other opposition parties in the upcoming winter session."We will be actively collaborating with and talking to other parties...We will play a very important role of the opposition during the session", he said, adding that the issue of black money would also be raised forcefully.Alleging "crony capitalism" behind the loan to Adani, Maken said the government was only interested in working for the rich and its promised "good days" have come only for them.'Good days are to come' was a key slogan of Modi-led BJP in the Lok Sabha polls.Maken said while the government launched a "Jan Dhan Yojana" promising prosperity for the people, their hard-earned money was being "doled out" to industrialists like Adani through such loans.Asked whether Congress can approach the judiciary over the issue, Maken said as a political party they will fight a "political battle" over it in Parliament and outside, and added "we will exercise all our rights to make people aware of this."