Banks will have to pay price if any telco files for bankruptcy: SBI Chairman

SBI Chairman Rajnish Kumar said not just lenders, but the entire ecosystem would have to “pay the price” if any telecom firm went bankrupt.

By: ENS Economic Bureau
New Delhi | February 16, 2020 01:34 AM IST

2 min read

According to State Bank of India Chairman Rajnish Kumar, the increase in deposit insurance limit from existing Rs one lakh to Rs 5 lakh was necessary. (File photo)

A day after the Supreme Court warned telecom companies for their failure to clear Rs 1.47 lakh crore in past adjusted gross revenue (AGR) dues, SBI Chairman Rajnish Kumar said not just lenders, but the entire ecosystem would have to “pay the price” if any telecom firm went bankrupt.

Stating that no such company had yet communicated to him their intention to shut shop, he said: “If there is a negative impact on any enterprise (in telecom or elsewhere), it impacts a larger ecosystem, whether it is banks, employees, vendors, consumers, etc. Everybody gets impacted. So, that impact, when it comes, we will have to pay the price.” He was responding to a query on the potential impact on banks if telcos went bankrupt. Kumar said both Bharti Airtel and Vodafone Idea are standard accounts as of now, and that only two accounts (Aircel and RCom) have been declared as non-performing assets.

Banks have an exposure of as much as Rs 49,463 crore to Vodafone. As for AGR dues, Bharti Airtel owes Rs 35,586 crore, Tate Teleservices Rs 13,823 crore and Reliance Communications Rs 20,434 crore.

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