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2 Indian banks detail exposure to Gupta family in South Africa

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2 Indian banks detail exposure to Gupta family in South Africa

India-based Bank of Baroda and Bank of India issued statements clarifying media reports on their exposure to the politically connected Gupta family in South Africa.

Bank of Baroda said in a March 8 filing that its credit exposure to the Gupta family companies stands at 1.47 billion Indian rupees in four accounts, accounting for 0.03675% of its total advances. The lender added that two of the borrowers are under business-rescue operations and it is confident in the recovery of loans, while borrowers of the other two accounts have proposed a plan for the full repayment of loans.

The Indian bank also said it will make provisions as required by regulators on the four accounts.

The statement came after The Economic Times of India reported March 7 that Bank of Baroda might have to provide for a potential loss of 1.20 billion rupees on loans to the Guptas.

In February, Bank of Baroda announced that it will exit from its operations in South Africa, following a probe by local regulators into its dealings with the Guptas. It will cease to operate as a bank in the African nation beginning March 31.

Meanwhile, Bank of India said in a separate March 8 filing that its outstanding exposure to the Gupta family companies is 275.8 million rupees. The bank noted that it does not see any material impact due to a same-day news report in The Economic Times that the bank "may face some heat" after extending 38.5 million South African rand in loans to two Gupta family companies.

The Gupta family allegedly leveraged their position with former South African President Jacob Zuma to obtain lucrative state contracts. Zuma stepped down as president in February.

As of March 8, US$1 was equivalent to 65.14 Indian rupees and 11.91 South African rand.