Mumbai : Country’s largest lender State Bank of India (SBI) on Friday said it has not cancelled unused line of credit to debt-laden telecom sector amid reports of tightening of screw by lenders.
RBI recently asked banks to immediately review their exposure to the telecom sector, which has total debt of about Rs 4.6 lakh crore, and make higher provisions to firewall their business against any future stress.
The sector is facing the squeeze on revenues and profitability in the wake of cut-throat competition following entry of Reliance Jio.
“As regard to withdrawal of these unused line of credit to telecom sector, we have not withdrawn any unutilised limit. As a matter of general practise, we do review all the accounts irrespective of which sector, including telecom,” SBI, managing director, B Sriram said here.
“In terms of saving our capital we do take informed decisions to try and use limits where it is required,” he said. At the same time, SBI, chairperson Arundhati Bhattacharya said that even for the unutilised limit the bank needs to keep the capital. She, however, added, “So, we have a cancellability clause for unutilised limits so that we don’t unnecessary block up capital. This is a regular review that is taken and where the limits are unused for a period of time, there we simply cancel it.”
SBI has exposure of less than 1 per cent in telecom sector. Sriram said, “As far as our telecom exposure is very minuscule. It was 1.4 per cent, which was Rs 18,000 crore. Post-merger it has reduced to less than 1 per cent.
“This is the total exposure and of which, generally at any given time, about 70-75 per cent is utilised. It may be utilised by one company and not by others… It’s goes around between companies.”
Various telecom companies including Airtel, Vodafone and Reliance Jio have, separately, denied cancellation of existing line of credit by any bank. “No credit lines of Vodafone India have been cancelled by SBI or any other bank. Therefore, Vodafone India remains unaffected by this decision,” Vodafone spokesperson said. “State Bank of India has not cancelled any existing Line of Credit for Reliance Jio,” the spokesperson said.
SBI cuts interest rates on home loans above Rs 75 L
Mumbai: Close on the heels of RBI’s policy action, India’s largest lender State Bank of India has lowered interest rates by 10 basis points on home loans above Rs 75 lakh.The new rates are effective June 15. For the salaried woman, the new rate will be 8.55 per cent while for others, it is 8.60 per cent. “Taking a cue from the recent RBI reduction in risk weightage on home loans, SBI is passing on the benefit to its customers by reducing its interest rates on home loan above Rs 75 lakh,” MD (national banking) Rajnish Kumar said. For housing loans above Rs 75 lakh, the central bank lowered the risk weight to 50 per cent, from the earlier 75 per cent.
