### Indian Banks Scrutinize Adani Exposure Amid Alleged Bribery Scandal

Indian banks are reevaluating their involvement with the Adani Group following allegations of a $265 million bribery scheme against its founder, Gautam Adani, by U.S. authorities. Shares of the group’s publicly listed companies, which had seen as much as $34 billion in market value erased, have started to recover due to support from partners and investors.

State Bank of India (SBI) has decided to continue funding ongoing Adani projects nearing completion but will implement stricter controls to ensure compliance with all terms and conditions. Similarly, Bank of India, Union Bank, ICICI Bank, Canara Bank, IDBI Bank, and RBL Bank, which have smaller exposures to Adani, are conducting their own reviews. According to a regulatory source, the banking system does not consider any entity to be over-exposed to Adani Group, alleviating broader concerns.

In response to the allegations, Israel has expressed a desire for continued investment from the Adani Group, stating that the U.S. accusations were not problematic from its perspective. The Adani Group owns a 70 percent stake in Haifa port and is involved in multiple projects in Israel, including the manufacture of military drones and commercial semiconductors.

The U.S. authorities have indicted Adani and seven others, alleging they were part of a scheme to bribe Indian officials to secure power supply contracts—a charge the conglomerate has denied. Abu Dhabi's International Holding (IHC), a significant foreign investor in Adani, has publicly backed the group, emphasizing confidence in their green energy and sustainability initiatives.

Investors have responded positively, with shares in Adani Green and Adani Energy each climbing by 10 percent, hitting the cap on single-session gains for the second consecutive day. Although the value of Adani Group’s 10 listed companies still shows a total loss of $14.5 billion, this is a significant recovery from the $34 billion low earlier in the week.

Global investors remain cautious but optimistic, suggesting that while the allegations may cause short-term volatility and bring governance under a microscope, they do not alter the underlying reasons for investing in India’s burgeoning economy and vast consumer market. Despite the upheaval, Indian authorities have refrained from commenting or engaging in opposition demands for a formal debate on the matter.

Political opposition in India has criticized Prime Minister Narendra Modi and his Bharatiya Janata Party for allegedly shielding Gautam Adani and impeding investigations—a claim both have denied. The group has been under scrutiny since January 2023, following accusations from Hindenburg Research of stock manipulation and concerns over its debt levels, all of which Adani has contested.

Recent events include the SEC charging Adani with securities law violations, though not under the U.S. Foreign Corrupt Practices Act. The civil suit runs parallel with U.S. federal prosecutors' indictment, escalating the pressure on the conglomerate, contributing to credit rating agencies lowering their outlook on some Adani companies.

Further repercussions include TotalEnergies halting additional investments in Adani Green, in which it holds a 20 percent stake, pending clarity on the allegations. Kenya has canceled a $2 billion procurement project planned to grant Adani control of the main airport, and a public-private partnership valued at $736 million. Sri Lanka has announced an investigation into Adani-related projects, while Bangladesh is scrutinizing power generation contracts signed with Adani Power under previous government leadership.