family of B. Ramalinga Raju,Indian banks and foreign banks operating in the country have either lent or provided guarantees

Indian banks and foreign banks operating in the country have either lent or provided guarantees of around Rs8,000 crore to various companies promoted by the family of B. Ramalinga Raju, the jailed former chairman of Satyam Computer Services Ltd. The RBI official did not want to be named as he is not the official spokesperson for the central bank.Capital concern: A file photo of Satyam founder B. Ramalinga Raju. A group of lenders is gunning for a seat on the board of Maytas Infra Ltd, which is headed by Teja Raju, the eldest son of Ramalinga Raju. Madhu Kapparath / MintMaytas Infra is headed by Teja Raju, eldest son of Ramalinga Raju, who admitted to fiddling with the accounts of the technology services firm he founded. The infrastructure firm has been engulfed by the Satyam mess and lost several contracts since early January.State Bank of India (SBI), ICICI Bank Ltd, Hongkong and Shanghai Banking Corp. Ltd (HSBC), Citibank NA and HDFC Bank Ltd are the leading bankers to a clutch of firms promoted by the Raju family.“Banks’ total outstanding to Maytas Infra is to the tune of Rs3,500 crore, of which Rs1,500 crore is fund-based. Additionally, banks also have exposure to Maytas Properties and to select small-time investment companies floated by the Raju family,” added RBI official. “These exposures are mainly in the form of guarantees.”The central bank, however, is unlikely to tell the banks it regulates what should be done about these exposures. “We are not giving any advice to the banks on business decisions. Based on their risk appetite, they are free to decide if they want to continue to lend to these entities,” the central banker added.Fund-based exposures are when banks lend cash to companies. Non-fund exposures are credit facilities given by the banks where actual lending is not involved. Guarantees are one form of non-fund banking services, where the bank picks up the tab in case a company defaults on its obligations.
“ICICI Bank has the largest exposure to the Raju family promoted firms. This includes both fund-based and non fund-based, including guarantees,” said the RBI official. “State Bank of India has an exposure of about Rs500 crore.”
SBI chairman O.P. Bhatt had earlier confirmed in a public statement that his bank has an exposure of around Rs500 crore to Maytas Infra and Maytas Properties. The latter is an unlisted real estate developer.Charudatta Deshpande, spokesperson of ICICI Bank, in an email response said, “We are one of several bankers to Maytas Infrastructure and are reviewing our exposure. We cannot comment on individual lending exposures. We will issue any disclosures if and when we assess that there is an impact that requires such disclosure. We are monitoring our exposure and exploring possible courses of action with other lenders; cannot comment further at this stage.”