Finance Minister Arun Jaitley on Tuesday said banks have an exposure of Rs 97,681 crore in the telecom sector, which is grappling with financial stress. In a written reply to the Rajya Sabha, Jaitley said SBI Chairman has pointed out that stress in the telecom sector has reached "highly unsustainable levels" due to the erosion of topline and earnings of the service providers. Quoting the Reserve Bank of India figure, Jaitley said total outstanding (funded) advances by public sector banks to the 'communications' sector stood at Rs 63,415 crore, while total exposure to the sector worked out to be Rs 97,681 crore. 'Communications' sector includes telecom — fixed network; telecom towers; telecommunications and telecom services. For public sector banks, the gross Non Performing Asset (NPA) ratio and stressed advances ratio for the sector stood at 3.68 per cent and 11.29 per cent respectively, at the end of 2016-17 fiscal. Jaitley further said the SBI Chairman (Arundhati Bhattacharya) has made certain recommendations for tackling stress in the sector. The suggestions, include aligning deferred payment liabilities for spectrum for its life, rationalisation of regulatory charges, quick resolution of litigation on the definition of adjusted gross revenues, easing regulation of merger and acquisition. "Government has already constituted an Inter-Ministerial Group for the sector," the financed minister said. At present, a portion of spectrum auction amount is taken as upfront payment by Department of Telecommunication, and the rest after a two-year moratorium is paid out every year in 10 instalments. The Indian telecom industry is locked in an intense tariff war following entry of Reliance Jio.
Banks' exposure to telecom sector at Rs 97,681 crore, says Jaitley
The Indian telecom industry is locked in an intense tariff war following entry of Reliance Jio
Press Trust of India |