PSU banks' Rs 10k cr-exposure in telcos hit by SC order

Public sector banks have an exposure of about Rs 10,000 crore in the telecom companies whose licences were cancelled by the Supreme Court in connection with 2G scam.

"The public sector banks have an outstanding loan of Rs 10,000 crore...Of which Rs 7,500 crore is secured (against assets)", a senior Finance Ministry official said.

The Ministry, the official said, was seeking information about the collaterals against which the remaining amount of Rs 2,500 crore was provided to the telecoms which figure in the list of companies whose licences were cancelled by the Supreme Court yesterday.

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 yesterday 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.

It had also imposed a fine of Rs 5 crore each on three telecom companies, which offloaded their shares after getting the licences and directed regulator Telecom Regulatory Authority of India (TRAI) to make fresh recommendations on allocation of 2G licences.

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, Corporation Bank, Oriental Bank of Commerce too have exposure in these telecom companies.

Punjab National Bank (PNB) said its exposure for roll-out under 2G is limited to Rs 508 crore. However, the bank did not give any loan for seeking licence.

PNB has total exposure of Rs 10,923 crore to the telecom sector. Of this, the bank's exposure to the government sector is Rs 1,016 crore, the bank said.

"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 Deputy Managing Director (DMD) Santosh Nair had said yesterday.

Another state-owned lender, Corporation Bank, said it has exposure of Rs 146 crore in one of the telcos hit by the order.

"We have Rs 146 crore exposure to Videocon Mobile. Though it is a secured funding, we are a bit worried as to how it will pan out post the Supreme Court verdict," Corporation Bank Chairman and Managing Director Ajay Kumar had said.

Even Oriental Bank of Commerce (OBC) said the bank had disbursed loans to telcos whose licences have been cancelled.

Loans have been given to all leading players. However, there are some concerns on the loans given, a senior official of OBC said.