Country’s largest lender State Bank of India (SBI) said it has not cancelled unused line of credit to debt-laden telecom sector amid reports of tightening of screw by lenders.
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 Reliance Jio.
SBI Managing Director B Sriram said that as regard to withdrawal of the unused lines of credit to the telecom sector, SBI has not withdrawn any unutilised limit and as a matter of general practise, SBI do review all the accounts irrespective of which sector, including telecom.
At the same time, SBI Chairperson Arundhati Bhattacharya said that even for the unutilised limit the bank needs to keep the capital.
Various telecom companies including Bharti Airtel, Vodafone and Reliance Jio have, separately, denied cancellation of existing line of credit by any bank. No credit lines of Vodafone India have been cancelled by SBI or any other bank. Therefore, Vodafone India remains unaffected by this decision.
By Baishakhi Dutta