State Bank of India (SBI) on Thursday said it had an exposure of Rs.4,500 crore in the telecom companies whose licences had been cancelled by the Supreme Court in connection with the 2G scam.
The other lenders including Punjab National Bank, Corporation Bank, Oriental Bank of Commerce too have exposure in these telecom companies.
“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 Santosh Nair said.
“For the Rs.1,100 crore, all the accounts are from corporate houses with whom we have long term relationships. The corporate house behind the licensee will help us or we also expect them to bid again at the time of the new auctions, which can secure our funds,” Mr. Nair said.
Punjab National Bank said its exposure for roll out under 2G was limited to Rs.508 crore. However, the bank had not given any loan for seeking licence.
PNB has a total exposure of Rs.10,923 crore towards the telecom sector. Of this, the bank's exposure to the government sector is Rs.1,016 crore, the bank said in a statement. It also said Rs.173 crore was fully secured by bank's deposits.
Largest private sector lender ICICI Bank said it was unaffected from the cancellation of 2G licences. “ICICI Bank does not have any exposure at risk on account of cancellation of 2G licenses,” the bank spokesperson said.
However, Corporation Bank said it had exposure of Rs.146 crore in one of the telecos 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 said.
“We have to review the account in the light of this development though this has been a standard asset so far,” Mr. Kumar said.
Even Oriental Bank of Commerce (OBC) said the bank had disbursed loans to telecom companies whose licences had been cancelled.
Loans had been given to all leading players. However, there were some concerns over the loans given, a senior official of OBC said.
According to Indian Overseas Bank Chairman and Managing Director M. Narendra, the bank did not have exposure in these telecom companies. “We have got exposure of 1.21 per cent of total loans in the telecom sector including telecom infrastructure,” Mr. Narendra said, adding that the bank had sanctioned Rs.2,200 crore to the telecom sector. Following the Supreme Court order, Bank of Baroda said the bank did not fund the affected telecom companies. “We have not funded any of the 2G licence holders,” Bank of Baroda Executive Director R. K. Bakshi said.
Even Axis Bank said the bank did not have any exposure to companies for acquisition of the 2G licenses or for the rollout of services on these licenses.
Another private sector lender, IndusInd Bank, also said it had not disbursed loans to telecom companies named in the order.
Earlier during the day, the Supreme Court 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.
The apex court also imposed a fine of Rs.5 crore each on three telecom companies, which offloaded their shares after getting the licenses and directed regulator Telecom Regulatory Authority of India (TRAI) to make fresh recommendations on allocation of 2G licences. Meanwhile, a senior executive at IDBI Bank said it did not have “much of exposure” to the affected companies.
