RBI seeks details of banks' exposure

In August, banks? commitment to the telecom firms was Rs 20,000 crore

The country’s central bank on Friday swung into action to take stock of banks’ exposure to the telecom firms affected by the Supreme Court’s order that cancelled 122 2G licences granted in 2008 during the regime of A Raja as telecom minister.

The Reserve Bank of India (RBI) has asked the banks to furnish details of their exposure in the telecom companies that are hit by yesterday’s cancellation of 2G licences. As on August, banks’ commitment to those companies were Rs 20,000 crore, of which they have already extended around Rs 15,000 crore.

Out of the Rs 15,000 crore, about Rs 6,000 crore was towards acquiring the licences. Now, the regulator has asked banks to furnish details of their exposure as on December 31, 2011.

According to central bank sources, RBI is aiming to find out the amount of loan that is given to those companies other than acquiring licences, which are mostly for capital expenditure.

“It is expected that telecom players whose licence is cancelled will get back their money,” according to a source. “But, some of the players have taken loans for further expansion. Cancellation of licences will jeopardise a firm’s capacity to pay back those loans.”

Banks are expected to furnish the data in a week. Banks overall exposure to the telecommunication sector as on December 30 was Rs 90,000 crore. Banks exposure to the sector has fallen 3.8 per cent on a year-on-year basis, after registering 80 per cent growth in the previous year.

The apex court has cancelled 122 2G spectrum licences Raja granted to 11 telecom players on the ground that they were issued arbitrarily and unconstitutionally. The cancellation will affect about five per cent of the total consumers, according to Trai, the telecom regulator.

Banks, including State Bank of India, Punjab National Bank, Canara Bank and IDBI Bank, have exposure in the firms affected by the apex court order. SBI’s total exposure to the affected companies is around Rs 4,500 crore.