UPDATE 1-India's SBI says further financing to Adani projects to be on merit

(Updates with more comments from official, background)

MUMBAI, Feb 3 (Reuters) - State Bank of India, the country's largest lender, said on Friday it has no concerns so far regarding its exposure to the embattled Adani Group and that any further financing to the conglomerate's projects would be "evaluated on its own merit".

The Adani Group, led by billionaire Gautam Adani, is reeling from a U.S. short-seller's scathing report last week that has cratered its shares, prompted calls from opposition lawmakers for a wider probe and the central bank to check on banks' exposure to the conglomerate.

SBI's total exposure to the conglomerate was 0.9% of its total loan book, or around 270 billion rupees ($3.30 billion), Chairman Dinesh Kumar Khara said on a post-earnings call.

There is "nothing so far" that is concerning regarding SBI's exposure to the group and the state-run lender does not see any challenges to the conglomerate's ability to service its debt obligations, Khara said.

On further lending to the group, Khare said, "It is a discussion which is vested with the credit committees and also the sanctioning authority. So, everybody will be very mindful about what the situations are."

So far, SBI has not received any request from the group to refinance their debt obligations, he said.

The chairman further clarified that lending to the group was towards projects with "adequate" cash generation and that SBI had not extended any loan against shares as collateral.

Earlier today, Reuters had reported, citing banking sources, that the Adani Group has reached out to banks to try to allay their concerns as some consider tighter credit rules.

Shares of Adani Group companies have lost more than than $100 billion combined, after the Hindenburg Research report was released last week. ($1 = 81.8810 Indian rupees) (Reporting by Siddhi Nayak and Chris Thomas; Editing by Nivedita Bhattacharjee and Savio D'Souza)