Banks Will Have To Pay The Price If Any Telecom Firm Files For Bankruptcy: SBI Chairman
Banks will “have to pay the price” in case any telecom firm files for bankruptcy, State Bank of India’s Chairman Rajnish Kumar said a day after the Supreme Court made it clear that telecom companies will have to pay the Rs 1.47 lakh crore in AGR dues.
SBI is in "wait-and-watch mode", Kumar said, adding that the onus of ensuring telecom companies' compliance with the Supreme Court order lies with the government’s Department of Telecommunications.
"If there is a negative impact on any enterprise, it impacts a larger ecosystem, whether it is banks, whether it is employees, vendors, consumers, so everybody gets impacted. So, that impact, when it comes, we will have to pay the price," Kumar said, when asked about the impact on banks if any telecom firm moves towards bankruptcy.
He was speaking to reporters on the sidelines of the unveiling of artworks—'Manasvi' and 'Tapasvi'—at SBI’s local head office in Mumbai. Around 400 computers, more than 2,000 microchips, over 400 keyboards and above 200 discarded credit cards were used to create the two artworks.
According to Kumar, the closure of any corporate impacts the country's economy and, therefore, the endeavour is to prevent the shutting down of any enterprise.
When asked if any telecom account is currently classified as non-performing asset, he said there are two accounts, Aircel and Reliance Communications Ltd., both of which are undergoing bankruptcy proceedings.
On Saturday, Reserve Bank of India Governor Shaktikanta Das said the central bank will have internal discussions in case there are any issues arising out of the Supreme Court order regarding adjusted gross revenue dues to be paid by telecom companies.
On Friday, the apex court threatened contempt proceedings against top executives of Bharti Airtel, Vodafone Idea and other telecom firms for failing to comply with its directive to pay an estimated Rs 1.47 lakh crore in past dues.
However, Das did not offer any specific comments about the order, which might have ramifications on banks in terms of their exposure to the financially-stressed telecom companies.
The payments to be made by the companies include Rs 53,000 crore by Vodafone Idea, Rs 35,500 crore by Bharti Airtel and Rs 14,000 crore by the now-defunct Tata Teleservices.