Industry

Banks will pay a price if a telco files for bankruptcy, says SBI

‘Onus of ensuring compliance with SC order lies with DoT’

SBI Chairman Rajnish Kumar on Saturday said banks will ‘have to pay the price’ in case any telecom firm files for bankruptcy, a day after the Supreme Court made it clear that telecom companies will have to pay the ₹1.47 lakh crore in past dues.

The chief of the country’s largest lender State Bank of India (SBI) said it is in the ‘wait-and-watch mode’ and the onus of ensuring telecom companies’ compliance with the Supreme Court order lies with the Department of Telecommunications (DoT) under the government. “If there is a negative impact on any enterprise, it impacts a larger ecosystem, whether it is banks, whether it is employees, whether they are vendors, consumers, so everybody gets impacted. So, that impact, when it comes, we will have to pay the price,” Mr. Kumar said, when asked about the impact on banks if telcos move towards bankruptcy.

He added that the closure of any corporate impacts the country’s economy and, therefore, the endeavour is to prevent the shutting down of any enterprise.

Asked if any telco account is currently classified as non-performing asset (NPA), he said there were two accounts — Aircel and RCom — that went into bankruptcy. Besides, he said SBI will not pass on the burden of the hike in premium of deposit insurance to its customers.

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Printable version | Jul 5, 2020 11:21:54 PM | https://www.thehindu.com/business/Industry/banks-will-pay-a-price-if-a-telco-files-for-bankruptcy-says-sbi/article30831399.ece

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