AGR verdict: Banks fear additional stress from telecom service providers

Intense competition among telcos had already impacted financial profile of firms and court judgment would now only add pressure to burden of paying interest and principal: Senior executive with SBI

Banks are bracing for additional stress on their exposure to telecom service providers following Supreme Court’s ruling on Thursday that the existing definition of adjusted gross revenue (AGR) will prevail.  The verdict is expected to put pressure on the telecom companies’ debt repayment capacity, leading to higher risk of defaults.

Senior executive with State Bank of India (SBI) said the intense competition among telecom players had already impacted financial profile of the firms and the court judgment would now only add pressure to burden of paying interest and principal. Telecom companies may seek additional time for payments and if this demand