PSU banks' exposure at Rs 14k cr

Chain reaction: Implications of SC verdict on telecom

The government, on Friday, said public sector banks have a total exposure of over Rs 14,000 crore to telecom companies whose licences have been cancelled by the Supreme Court though a bulk of the amount is backed by securities.

Out of the total exposure of Rs 14,345 crore, only Rs 2,888 crore given to big companies, including Idea Cellular, Tata Telecom, Uninor and Videocon, is unsecured.

“The total exposure to telecso is Rs 14,345 crore. Out of this Rs 2,888 is to big companies Idea, Tata Telecom, Uninor and Videocon which does not have security except telecom licence and assets created by these companies,” Financial Services Secretary D K Mittal told PTI. He further said that though the total funds provided by PSU banks to telecos hit by the Supreme Court order was Rs 14,345 crore, the amount involved in 122 cases was limited to Rs 3,299 crore and it is not a matter of concern.

The exposure of PSU banks in these telecom companies, he added, was “very much limited” in view of the overall asset size of the state-owned lenders.

The apex court, on Thursday, cancelled 122 2G spectrum licences granted by former telecom minister A Raja on the ground that they were issued in a “totally arbitrary and unconstitutional” manner.

As far as individual lenders are concerned, State Bank of India said it had total exposure of Rs 4,500 crore in these telecom companies. The other lenders including Punjab National Bank (PNB), Corporation Bank, Oriental Bank of Commerce too have exposure in these telecom companies. PNB said its exposure for roll-out under 2G is limited to Rs 508 crore.

“I don’t think we will be affected much by the verdict. We have a fund-based exposure of Rs 1,100 crore in five accounts, while another Rs 3,400 crore are non-fund based, which is based on a guarantee of roll-out. Now that the licences are cancelled, that guarantee is not fulfilled,” SBI DMD Santosh Nair had said on Thursday.