New Delhi: Finance Minister Arun Jaitley on Tuesday said banks have an exposure of Rs 97,681 crore in the telecom sector, which is grappling with financial stress.
In a written reply to the Rajya Sabha, Jaitley said State Bank of India (SBI) Chairman has pointed out that stress in the telecom sector has reached "highly unsustainable levels" due to erosion of topline and earnings of the service providers.
Quoting the Reserve Bank of India figure, Jaitley said total outstanding (funded) advances by public sector banks to the 'communications' sector stood at Rs 63,415 crore, while total exposure to the sector worked out to be Rs 97,681 crore. 'Communications' sector include, telecom - fixed network; telecom towers; telecommunications and telecom services.
For public sector banks, the gross Non Performing Asset (NPA) ratio and stressed advances ratio for the sector stood at 3.68 percent and 11.29 percent respectively, at the end of 2016-17 fiscal.
Jaitley further said the SBI Chairman (Arundhati Bhattacharya) has made certain recommendations for tackling stress in the sector. The suggestions, include aligning deferred payment liabilities for spectrum for its life, rationalisation of regulatory charges, quick resolution of litigation on definition of adjusted gross revenues, easing regulation of merger and acquisition.
"Government has already constituted an Inter-Ministerial Group for the sector," the financed minister said.
At present, a portion of spectrum auction amount is taken as upfront payment by Department of Telecommunication, and the rest after a two-year moratorium is paid out every year in 10 instalments.
The Indian telecom industry is locked in an intense tariff war following the entry of Reliance Jio.
Published Date: Jul 26, 2017 09:05 am | Updated Date: Jul 26, 2017 09:05 am