State Bank of India (SBI) on Friday day said it has not cancelled unused line of credit to debt-laden telecom sector amid reports of tightening of screw by lenders. The 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“As regard to withdrawal of these unused line of credit to telecom sector, we have not withdrawn any unutilised limit.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.