2G licence cancellation to affect banksFebruary 2nd, 2012 - 6:34 pm ICT by IANS
New Delhi, Feb 2 (IANS) Major lenders including State Bank of India and Punjab National Bank have lent money to most of the telecom firms whose 2G licences will be cancelled following the Supreme Court’s Thursday verdict.
State Bank of India, the country’s largest lender, has funded exposure of Rs.1,100 crore to the affected telecom firms.
Deputy managing director of SBI Santosh Nair said the bank has also issued guarantees for the licences and has non-fund exposure to the tune of Rs.3,400 crore.
“This is basically guarantees issued for the license, if the licences are cancelled these guarantees will also stand cancelled,” Nair told a private TV channel.
The SBI’s total exposure to telecommunication sector as on March 31, 2011 is over Rs.23,000 crore.
The Supreme Court Thursday cancelled all 122 licences for 2G spectrum allocated in 2008 during the tenure of the then telecom minister A. Raja.
India’s second largest public sector lender Punjab National Bank has exposure to most of the affected companies, sources said.
Indian Bank has exposure to the tune of Rs.39 crore to the affected companies.
Share price of State Bank of India plunged almost 5 percent soon after the apex court verdict. However, later in the day the price rebounded and the SBI scrip closed 0.21 percent down at Rs.2,072.65 at the Bombay Stock Exchange Thursday.
Punjab National Bank closed 0.21 percent down at Rs.953.50 after slumping to a low of Rs.922.70 in the intra-day at the BSE.
However, reacting to the development, Telecom Minister Kapil Sibal said the apex court verdict would bring clarity in the telecommunication sector and the investors should see it as a good opportunity for investment.
“After this judgment the future is clear. Telecom sector has huge scope for investment,” Sibal told reporters here.
- Ensure money lent to telecom firms is given back: SBI - Feb 16, 2012
- Indian banks can absorb 2G licence losses: Fitch Ratings - Feb 03, 2012
- TRAI says no need for exit policy - Apr 18, 2012
- Telenor writes down remaining Indian assets worth $680 mn - Apr 30, 2012
- Telecom tariffs to rise 37 to 49 paise at Rs.1,400 crore reserve price: COAI - Aug 06, 2012
- Affected telecom firms file review pleas in Supreme Court (Lead) - Mar 02, 2012
- SBI eyes more branches in Bangladesh - Nov 14, 2011
- Telecom judgement paves way for policy clarity: Experts - Feb 03, 2012
- Foreign telecom firms want government to clarify stand (Lead) - Feb 02, 2012
- Cabinet okays Rs.14,000 crore spectrum reserve price (Lead) - Aug 03, 2012
- SBI stock plunges on talk of loan to Kingfisher - Feb 22, 2012
- Government wants 2G auction deadline extended to November - Aug 07, 2012
- 2G: PM holds meet to discuss apex court verdict fallout (Lead) - Feb 11, 2012
- SBI to approach Moody's for review and re-rating - May 18, 2012
- Vodafone chief Vittorio Colao meets Sibal - Feb 13, 2012
Tags: apex court, bank of india, bombay stock exchange, court verdict, crore, feb 2, kapil sibal, nair, private tv channel, punjab national bank, rs 1, rs 2, santosh, sbi, scrip, state bank, state bank of india, telecom firms, telecom sector, telecommunication sector