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SBI allays fears of tightening screw against telecom sector, says it hasn't cancelled unused credit lines

Reserve Bank of India had recently asked banks to review their exposure to the debt-ridden sector

Press Trust of India  |  Mumbai 

SBI, State Bank of India, Arundhati Bhattacharya
L to R - Arundhati Bhattacharya, Chairman, SBI and Rajanish Kumar, MD, National Banking Group, SBI at the press conference in Mumbai on June 9. (Photo: Kamlesh D Pednekar)

Country's largest lender of (SBI) said on Friday that it has not cancelled unused line of credit to debt-laden telecom sector amid reports of tightening of screw by lenders.

Reserve of India(RBI) recently asked banks to immediately review their exposure to the telecom sector, which has total debt of about Rs 4.6 lakh crore, and make higher provisions to firewall their business against any future stress.

The sector is facing the squeeze on revenues and profitability in the wake of cut-throat competition following entry of Jio.

"As regard to withdrawal of these unused line of credit to telecom sector, we have not withdrawn any unutilised limit. As a matter of general practise, we do review all the accounts irrespective of which sector, including telecom," Managing Director B Sriram said here.

"In terms of saving our capital we do take informed decisions to try and use limits where it is required," he said.

At the same time, Chairperson Arundhati Bhattacharya said that even for the unutilised limit the needs to keep the capital.

She, however, added: "So, we have a cancellability clause for unutilised limits so that we don't unnecessary block up capital. This is a regular review that is taken and where the limits are unused for a period of time, there we simply cancel it."

Asked if is reviewing limits in other sectors, Bhattacharya said the is yet to come up with the board policy.

"But more or less we continually look at all the sectors and continually rate all the sectors as to which sectors are good. This kind of a rating goes on for every sector on a quarterly basis and that is already being done," she said.

"Based on that we will take a call by the end of June on what it shows in this particular quarter and accordingly we will bring a policy on how much more of a standard provision we can do," she added.

has exposure of less than 1 per cent in telecom sector.

Sriram said: "As far as our telecom exposure is very minuscule. It was 1.4 per cent, which was RS 18,000 crore. Post merger it has reduced to less than 1 per cent.

"This is the total exposure and of which, generally at any given time, about 70-75 per cent is utilised. It may be utilised by one company and not by others... It's goes around between companies."

Various telecom companies including Airtel, Vodafone and Jio have, separately, denied cancellation of existing line of credit by any

"No credit lines of Vodafone have been cancelled by or any other Therefore, Vodafone remains unaffected by this decision," Vodafone spokesperson said.

"of has not cancelled any existing Line of Credit for Jio," the spokesperson said.

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SBI allays fears of tightening screw against telecom sector, says it hasn't cancelled unused credit lines

Reserve Bank of India had recently asked banks to review their exposure to the debt-ridden sector

Reserve Bank of India had recently asked banks to review their exposure to the debt-ridden sector
Country's largest lender of (SBI) said on Friday that it has not cancelled unused line of credit to debt-laden telecom sector amid reports of tightening of screw by lenders.

Reserve of India(RBI) recently asked banks to immediately review their exposure to the telecom sector, which has total debt of about Rs 4.6 lakh crore, and make higher provisions to firewall their business against any future stress.

The sector is facing the squeeze on revenues and profitability in the wake of cut-throat competition following entry of Jio.

"As regard to withdrawal of these unused line of credit to telecom sector, we have not withdrawn any unutilised limit. As a matter of general practise, we do review all the accounts irrespective of which sector, including telecom," Managing Director B Sriram said here.

"In terms of saving our capital we do take informed decisions to try and use limits where it is required," he said.

At the same time, Chairperson Arundhati Bhattacharya said that even for the unutilised limit the needs to keep the capital.

She, however, added: "So, we have a cancellability clause for unutilised limits so that we don't unnecessary block up capital. This is a regular review that is taken and where the limits are unused for a period of time, there we simply cancel it."

Asked if is reviewing limits in other sectors, Bhattacharya said the is yet to come up with the board policy.

"But more or less we continually look at all the sectors and continually rate all the sectors as to which sectors are good. This kind of a rating goes on for every sector on a quarterly basis and that is already being done," she said.

"Based on that we will take a call by the end of June on what it shows in this particular quarter and accordingly we will bring a policy on how much more of a standard provision we can do," she added.

has exposure of less than 1 per cent in telecom sector.

Sriram said: "As far as our telecom exposure is very minuscule. It was 1.4 per cent, which was RS 18,000 crore. Post merger it has reduced to less than 1 per cent.

"This is the total exposure and of which, generally at any given time, about 70-75 per cent is utilised. It may be utilised by one company and not by others... It's goes around between companies."

Various telecom companies including Airtel, Vodafone and Jio have, separately, denied cancellation of existing line of credit by any

"No credit lines of Vodafone have been cancelled by or any other Therefore, Vodafone remains unaffected by this decision," Vodafone spokesperson said.

"of has not cancelled any existing Line of Credit for Jio," the spokesperson said.
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Business Standard
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SBI allays fears of tightening screw against telecom sector, says it hasn't cancelled unused credit lines

Reserve Bank of India had recently asked banks to review their exposure to the debt-ridden sector

Country's largest lender of (SBI) said on Friday that it has not cancelled unused line of credit to debt-laden telecom sector amid reports of tightening of screw by lenders.

Reserve of India(RBI) recently asked banks to immediately review their exposure to the telecom sector, which has total debt of about Rs 4.6 lakh crore, and make higher provisions to firewall their business against any future stress.

The sector is facing the squeeze on revenues and profitability in the wake of cut-throat competition following entry of Jio.

"As regard to withdrawal of these unused line of credit to telecom sector, we have not withdrawn any unutilised limit. As a matter of general practise, we do review all the accounts irrespective of which sector, including telecom," Managing Director B Sriram said here.

"In terms of saving our capital we do take informed decisions to try and use limits where it is required," he said.

At the same time, Chairperson Arundhati Bhattacharya said that even for the unutilised limit the needs to keep the capital.

She, however, added: "So, we have a cancellability clause for unutilised limits so that we don't unnecessary block up capital. This is a regular review that is taken and where the limits are unused for a period of time, there we simply cancel it."

Asked if is reviewing limits in other sectors, Bhattacharya said the is yet to come up with the board policy.

"But more or less we continually look at all the sectors and continually rate all the sectors as to which sectors are good. This kind of a rating goes on for every sector on a quarterly basis and that is already being done," she said.

"Based on that we will take a call by the end of June on what it shows in this particular quarter and accordingly we will bring a policy on how much more of a standard provision we can do," she added.

has exposure of less than 1 per cent in telecom sector.

Sriram said: "As far as our telecom exposure is very minuscule. It was 1.4 per cent, which was RS 18,000 crore. Post merger it has reduced to less than 1 per cent.

"This is the total exposure and of which, generally at any given time, about 70-75 per cent is utilised. It may be utilised by one company and not by others... It's goes around between companies."

Various telecom companies including Airtel, Vodafone and Jio have, separately, denied cancellation of existing line of credit by any

"No credit lines of Vodafone have been cancelled by or any other Therefore, Vodafone remains unaffected by this decision," Vodafone spokesperson said.

"of has not cancelled any existing Line of Credit for Jio," the spokesperson said.

image
Business Standard
177 22